Are you in need of some extra cash, and you are thinking that the best way to get it is with an auto title loan? You'll want to ask the following questions before you get one so that you fully understand the terms of your loan.
When Will The Loan Need To Be Paid Back?
It's important to know when the auto title loan will need to be paid back in full. Repayment periods will vary from lender to lender, so it's always worth asking about how long the length of the loan will be. One lender may give you a 1 year loan period while another gives you up to 3 years. It all depends on what you're comfortable with when it comes to being able to pay back the loan in full.
What Is The Interest Rate?
Knowing the interest rate is crucial because it will ultimately decide how much you are paying to borrow the money you need. Be aware that auto title loans often have a high-interest rate, which is due to the risk that the lender takes on. Auto title loans are secured by your vehicle, but they are offered to people with poor credit, bankruptcies, and other financial problems.
What Happens If A Payment Is Missed?
There may come a month where you miss your monthly payment and it is late. Find out what happens if you do miss a payment since there will likely be a hefty penalty as a result. You should also ask if there is a grace period for when the lender needs to receive their monthly payment since you may have an extra day or two to make it without a penalty.
Will Your Vehicle Be Monitored?
One of the nice things about an auto title loan is that you can still keep your vehicle for the duration of the loan. However, the lender may need to repossess the vehicle one day if you decide to stop making payments towards the loan. Ask if there will be any sort of monitoring device placed in the vehicle so that they can find it if necessary. Some people may not want this and would prefer to find an auto title loan that doesn't require it.
Can You Pay The Loan Off Early?
You may decide to pay off the loan early because you have the cash on hand. However, this is not always allowed by an auto title lender. While some will allow you to pay off the loan in full early, others will charge you a fee for doing so. Make sure you understand if there is a fee and when it applies.
Keep these tips in mind when applying for a car title loan near you.