Huge Mistakes To Avoid When Getting Title LoansFast Action Finance
It is a proven fact that you will never have all the money you need. Even if you accumulated money on a day-to-day basis for a year, you will still find yourself looking for ways on how to get more the other year. Loans turn out to be a necessary aspect of life. There are many types of loans in the market and the one to take depends on the need you have.
In the event that you need money fast and you are out of options, title loans are the best option for you. Many lenders offer this service and this article will explain some mistakes that you do not want to make when applying for the loan.
One feature that makes title loans popular is the fact that it is short term and you get to repay it from the next month onwards. It is very easy to get the cash you need through title loans, as the lender will furnish you with the money within 24 hours once it has been approved. To make it even better, the money is sent straight to your bank account hence you do not need to leave your home to make the application. A majority of lenders that offer title loans will not even bother to check your credit records and history and this makes these loans popular. So long as you have a car, you can get a title loan using the car as collateral.
Even though the title loan is easy to apply, you still want to make sure that you are not making mistakes with it. So here is what you need to take note of:
Do not take a loan that you cannot repay
You need to know that one area that the lender maximizes on is on the interest rates. For example, you might borrow just $ 200 but you will be required to repay with an interest of $ 50 and this is for a two-week period. In the event that you fail to repay, you will have to repay the original amount borrowed, the interest rate and the lender will assume that you have borrowed the $50 interest hence charge you interest on the same. After another two-week period, the amount of money you owe can be crazily high and you want to avoid this at all costs. For this reason, make sure that you have the ability to repay the loan before applying for it.
Never take a title loan to pay another title loan
Nothing steals your peace and joy as knowing that you have a debt to repay in two days time and you have no money to repay it. This has tempted many people to take a second title loan to repay the current one. If you try this once and it works, you will be tempted to make it a habit and before you know it, you will have various lenders looking for your neck. You might think that the amounts borrowed are small but there are people that have made this mistake and ended up filing for bankruptcy. It is advisable for you to always take one auto title loan at a time and never take a second one before repaying the first one. More so, it is very important that you stay sober minded and not just follow your anxious emotions.
Applying for the loan without researching
Many borrowers make rushed decisions out of their urgency for the money and hence apply for a title loan with the first lender they come across. This ends up being a mistake in that there are many laws, regulations and factors that you need to take into account before taking the loan. For instance, there are states that regulate the interest rates on all types of loans and if you are not aware of this, you can very easily be duped and end up paying higher interests on the loan. In addition, numerous lenders offer title loans on different interest rates and failing to research means that you will not get the best option, and you may end up dealing with a lender who is not legit. There is no need to rush. A little research will get you the best terms and conditions on the loan, making repayment easy for you.
What is the worst that could happen?
As you take the loan, you need to understand that paying a high amount on interest rates and penalties is not the worst that can happen. What is worse is that your car will be possessed by the lender if you are unable to repay the loan. This means that you lose your own means of transport and if it was the family car, everyone in the family gets affected as well. This can cause a serious strain on family relationships especially if you had not disclosed the fact that you are taking a title loan.