Understanding The Most Important Terms Used In Auto Title Loans Before Signing For OneFast Action Finance SEO
Do you need some urgent cash to sort out an emergency? We all find ourselves in situations where we need cash urgently to sort an immediate need but we don’t have the amount. Applying for a loan is one way to acquire funds and repay later on. You may want to try and find alternative sources of money before you can settle on getting a loan. You can try borrowing relatives or friends first. If other avenues to acquire cash are not successful, you can apply for auto title loans in Mississauga for other places in the GTA from trusted lenders.
A car title loan is where you use your car as security to apply for a loan. All you need to have is a lien-free car, an ID, and insurance. The lender places a lien on your car while you continue using your car as you repay your loan. It is a great way to get some quick cash to sort out your temporary money issues but you need to understand that the overall value of your car sets the boundaries on how much you can borrow against it.
This article will highlight some of the phrases used in a car title loan agreement and what they mean.
This is the term used to refer to the time set to pay back the loan. Usually, most car title loans take 1 year to 1 year and a half. You need to agree with the lender on the amount of interest to be paid on the principal amount. In the event you are unable to repay your loan when the term ends, you can ask your lender to set up a longer loan time.
The lender will work out the interest based on the timeline you are to pay back. The longer you take to repay your loan, the more the interest charged on the principal amount. You need to work out which option works best depending on your budget. It is better to avoid longer loan terms to avoid paying more interest.
Interest-only payments are offered on loans that take more than the term of the loan. A lender can extend your loan term, and during this time you are required to only pay interest. The advantage to this agreement is that it gives you enough time to come up with cash to repay your loan. The downside is that you pay more interest on your loan.
Some lenders require one to take add-ons as a requirement to qualify for a loan. Such add-ons may include full coverage insurance for your car. Others insist on breakdown insurance. If your car breaks down during a loan term that reduces the initial value of your car. But, if you have breakdown insurance, the lender is able to recover his whole amount if he repossesses your car. Talk to your lender about what add-ons may be required.
If you clear your loan in the required period, then you have the option to take out the same loan again for the same loan term. Some lenders allow borrowers to roll over the loan as many times as they like as long as they pay back in time. Other lenders have a limit on the number a borrower can roll over a loan. Rolling over is a good way to finance some projects and investments.
Early repayment penalties
There are times you’d think that by paying off your loan early you will cut back on interest charged. Well, this may not be the case with certain car title loans. Here at Fast Action Finance, we reward early repayment by giving early buyout discounts.
Each province has laws that limit lenders the amount of interest they can charge on title loans. This protects the borrower from aburd interest rates.
A lien is a legal document that allows the lender have a stake in the collateral given. If you default on many payments and you are unable to pay back your loan, then the lender has the right to sell your car. However, many lenders will work with you to ensure repossession does not occur. It is important to keep in contact with your lender if anything goes wrong.