What Title Loan Borrowers Need To Pay Attention ToFast Action Finance SEO
Unfortunately, some title loan borrowers apply for a loan before fully understanding what they are getting themselves into. This can happen to anyone, especially when pressed for time to get funds. Car title loans are one of the best financing options in the market that guarantee quick loans. You only need to own a lien-free car that is insured. You can approach a lender with the documents for your vehicle and get your loan processed in a matter of minutes. If you have a family or business emergency that requires instant cash, then applying for a car title loan can be a smart decision.
Even when pressed for time, you should always take the time to understand what you are signing for and the terms of any loan. Car title loans do not need too much processing time since the lender uses your car as collateral.
As a borrower, there are certain things you need to pay attention to before accepting a deal from the lender. Some people have been known to swallow more than they can chew after quickly signing off on loans that end up being more than they can handle. This article will highlight key areas you need to pay attention to and demand for answers from lenders before accepting any deal.
The total cost of your loan
You should always have the definite numbers you are dealing with regarding your loan. When you approach a lender, they first of all have to work out your loan limit and this is determined by the market value of your vehicle. After they work out a loan limit, they then calculate the interest depending on the loan term.
The loan term is how long it will take you to repay your loan. Most car title loans typically take one year to be repaid but you should never shy away from negotiating with your lender for a longer loan term. You can also ask your lender to disclose the percentage of the APR they use to calculate the interest on your loan. You can use this information to compare from different lenders to get the best deal.
Look for additional costs
This is where most borrowers go wrong. They simply don’t take the time to go through their paperwork to check for hidden charges that may be involved. You can always ask your lender to explain certain paragraphs in your agreement if you don’t fully understand the terms used.
If you have a lawyer, you can ask him to explain the loan terms and let you know of any hidden charges. These hidden charges help you to know how much you will spend overall on your loan. You can then use this information to decide whether applying for a loan is worth it or not.
Negative ramifications of the loan
You need to sit down and think of the negative upshots that may come about by applying for a loan. You should always think of what you stand to lose if you are unable to pay the loan. In the event that you are unable to pay, it is important to contact your lender and let them know of your situation. Many lenders will be willing to work with you.
The good news is that there are ways you can avoid this from happening if you don’t have the cash to pay off your debt. You can choose to downgrade your car to pay off your loan. How does this work?
For example, if your car’s market value is $8,000 and you have a car title loan of $4,000, you can look for a buyer willing to buy your car for $8,000. You can then use the cash to pay off your loan and use the balance to buy another car of a lesser value. However, you need to make the lender aware of your intentions as the vehicle will have a lien on it. Once the loan has been paid off then the lien will be removed immediately.
Take time to think of your decision
You may sit and conclude that going for a car title loan is the best solution you have for the moment, however, it never hurts to take some time to think over your decision. Your family and friends play a big role when it comes to borrowing as they can help with the payments in case something unfortunate happens.