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Published On: Thu, Jun 25th, 2020

Car title loans: Benefits and how to get the best rate

Although, a car title loan is a quicker way to access cash, however, not all individuals are eligible for the same. If you fail to get a loan from any other source due to bad credit history, using your car title to get a loan is perhaps the best way to meet your sudden financial requirements. Let us delve deeper into a few of the essential aspects of the same under the following sub-topics, namely,

When do you qualify for the loan?

How will you get the best rates?

So, let us take one sub-topic at a time in the paragraphs that follow-

When do you qualify for the loan?

You are eligible for the loan provided you fulfill a few simple car title loan requirements, which usually the majority of the people do. And these are as follows-

You have to provide documents that prove the vehicle belongs to you. So, the ownership document is required.

  • Documents related to vehicle insurance
  • Registration details of the vehicle
  • Income proof- This is required so that the lender is convinced that you will be able to repay the loan within the loan term period
  • Your social ID proof documents and proof of residency
  • Keys of the car

Aside from the above, you might also have to provide the contact details of a few references that the lender might want to contact if required. 

Once you qualify, you have to provide the bank account details so that the proceeds of the loan can be transferred at the earliest. 

photo supplied/ bankruptcydocumentslibrary.com/

How will you get the best rates?

You are well aware that since you do not have good credit or you have failed to get a loan from elsewhere, you may not stand a chance to get the best rates available in the market. However, you must still shop around for the best deals that are available. Take into account the following aspects when you shop for a car title loan-

Sense the motive

Just because you have bad credit and you are in dire need of cash does not mean you have to succumb to the ill-motives of the lenders. You will come across many such companies that think they are doing you a favor by offering the loan. Steer clear of such companies. These are companies that offer loans that have hidden costs and are usually not honest in their dealings.

Compare quotes from different lenders

Talk to different lenders that extend car title loans. Find out the fees and the rates of interest. Most importantly, you must know the APR or the Annual Percentage Rate, which is usually the trap that causes borrowers to get into a vicious debt cycle. 

Make a detailed note of all the charges, fees, and rates that the lender will take from you against the car title. Settle for the one that you assess is the best option for you. 

Try all options

When you are doing your bit of homework for taking out the loan, explore options online as well as from brick and mortar stores. Remember, the best of terms that you might enjoy on the car title loan will depend on the condition of your car. 

While the value of the car might be less to one lender, it might be a little better for someone else. In this regard, it is quite relative and this can be one factor that can make a marked difference between what you get to enjoy in terms of the loan. 

When you have the proceeds in your bank account, try not to fall behind on the payments so that you become debt-free as soon as possible.

Author: Jimmy Simond

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