How To Handle Your Car When Using It For Auto Title LoansFast Action Finance
Using your car title as collateral for a loan is currently one of the easiest ways to access credit. This is why auto title loans in Brampton are now considered to be one of the most customer friendly loan types available. If you are interested in using one of them, however, you need to pay attention to a few details that may affect the ease with which you can use the loan. Well, doing this will ensure that you can actually get more value for money out of the loan. It will also result in you avoiding some of the penalties that are sometimes associated with such loans.
To ensure that you have an excellent experience with car title loans, the typical advice that most people get is to work with a reliable lender. This is one of the best ways to ensure that you get the best terms. However, there are other factors that may also come into play, and you need to consider them. One of the most critical is how you use the car after you have submitted it for use as collateral in this setting. Some of the specific things you should sort out include:
Avoid lending out the car
Once you have used the car title as collateral for a loan, it would be a good idea to maintain the quality of the car just in case. Lending out the car is therefore not a good idea, unless you are extremely sure that the person you will lend it out to will take care of it. Some of the things that you risk having a problem with when you lend out a car include having it lost or damaged, in which case you may have a problem with the lender. In the worst case scenario, there are some people who could even be charged in court with fraud if the lender attempted to repossess the car and then found out that it was lost or stolen.
Avoid high risk driving
Similarly, you should also avoid scenarios where you have to drive in a high risk environment. Examples of these include extreme off-roading. Typically, such experiences end up damaging the car, and this means that it may no longer be suitable for use as collateral. If you damage the car and then failed to pay your loan, the lender may not be in a position to recover the loan to cover their costs.
The outcome may be similar to the above, where you may be taken to court or have other items repossessed instead. If you frequently use your car for such activities, you should avoid using its title as collateral for such a loan. Alternatively, you could consult the lender, and they will then give you information regarding whether or not you can still use it for a car title loan.
Don’t sell the car
The other potentially criminal activity that you should avoid when you have used the car for this type of collateral is selling it. An example of this is when you have no other sources of income, and intend to sell the car to get cash that you can use to pay off the loan. This is a step that is usually explicitly discouraged in most lenders’ terms and conditions, and may also result in court action. As long as you are still obligated to the lender, you will not be allowed to sell the car even if the outstanding loan is very small. If you intend to sell the car, you will first need to clear the car title loan first.
Don’t make major changes to the car
Depending on the lender’s terms, you may also be barred from making any major changes to the car that could reduce its value. Examples of these include changing the engine or modifying the bodywork or interior of the car. However, you should keep in mind that this is not a universal limit, and there are some lenders who may allow you to do it as long as you follow a few guidelines. You will therefore need to go through your loan terms before you can decide on whether to do this or not.
In summary, there is a lot that you need to keep in mind once you decide to apply for a car title loan. Remember that as long as the loan is still outstanding, the car will not technically belong to you though you will be allowed to use it as usual. Remember, violating some of the restrictions that most lenders will have often results in legal action as well as blacklisting, so that you may never be allowed to apply for such a loan again. It is therefore vital that you understand this, so that you can have an idea of what you can and can’t do with the car during this period.