Getting a car title loan may look like the best option if you need cash during emergency cases, or in those situations which require you to shell out a huge sum of money for whatever purpose. In these cases, getting a car title loan may also be your only option to get through a certain, possibly extreme, financial crisis. Why?
First of all, it is very easy to apply for a car title loan. Most of the time, you only have to submit documents which reveal that you are the rightful owner of your car. Unlike with payment loans and home equity loans, you do not need to present an initial down payment or a satisfactory credit score.
However, there are still things you need to be mindful of when you decide to look for one. Here are five things to avoid when getting a car title loan.
• Lenders that don’t discuss how you can pay back the car title loan
Any company that lends title loans should be able to discuss with you an effective payback plan. If your lender fails to accommodate you in this area or does not even let you in on certain loan documents and forms before you pen your signature, it’s best to turn the other way or file a complaint.
The Truth in Lending Act, a federal law, entitles you to know your Annual Percentage Rate, as well as the charge. Moreover, it’s also because you need these bits of information to weigh your options and come up with a decision.
• Lenders that have poor reviews or none at all
Needless to say, good reviews are essential to any company. In getting a car title loan, try to reach out to previous customers and find out what they say about the lender. There are quite a few high-rated companies offering car title loans in Long Beach that you might want to check out if you want a worry-free transaction.
• Lenders that are in the used car and pawn shop business
Lending companies that also manage pawn shops or used car businesses are always hungry for collateral. That is what keeps their businesses running, after all. Most of the time, they are just interested in taking possession of your car so that they can sell it. It is best to stay away from these kinds of lenders. However, if you decide that it’s your only option, you have to inspect all the loan contracts and documents for hidden charges and penalties.
• Lenders that make you buy add-ons
Add-ons, regardless of the types, are always scheming. You are not and should not be, in any way, obliged to pay for these features. Although they could help you within the loan period, bear in mind that they also add to the costs and charges.
• Lenders that are inconvenient
In getting a car title loan, you must go for a lender that doesn’t make paying them difficult in any aspect, whether it’s with their business hours, location, or their payment options. Bear in mind that there are companies that will prey on misinformed and gullible customers.
Getting a car title loan is not always the best option when dealing with a financial crisis, but should the need for it arise, it is important to know the kind of stuff you’re getting yourself into.