Title Loan Interest Rates
Let's be honest here. Everyone wants to get a loan with a low interest rate. If the interest rate is too high, they won't be able to pay down the principal. Unfortunately, title loans generally have higher interest rates than most other loans out there. There are many other terms out there for title loans like a pink slip loan, a title pledge or even a title pawn. In the end, these loans use your car title as collateral. Then again, you never want to have your car repossessed. This collateral helps make the transaction more secure.
Before you are able to get a title loan, you first have to apply for one. There are both physical locations and places online where you can do this. In order for you to apply, you will need to bring other things like a clear title, a photo I.D., and a couple other things. The proof of insurance will also be needed to secure the loan. If you apply, you better know the loan terms. The last thing you want to get stuck with is a title loan with a super high APR. The APR can be based on multiple things like your driving history, the cost of your car, and who you are going through. Also, beware of the add-ons that the loan requires. These things can be service fees, licensing fees, etc. If you do decide to purchase add-ons, they too are calculated with the APR. In other words, you will be paying more in interest. After the loan is approved, you will be all set.
Beware of your finances
Like I said, earlier, title loans are one of the most expensive financing activities that you can partake in especially when dealing with a depreciating asset like your car. On average, lender charges twenty-five percent every single month to finance the loan. For example, say you borrow $1,000 for 30 days. Within the month, you will owe at least $1,250 plus the additional fees. So, do your due diligence before getting approved for one of these loans. If you know you won't be able to finance it, don't do it! There are many better options out there. The last thing you want is a car repossession and a loan racking up a ton of interest month after month.
There are typically three ways you can pay for a title loan. The first way would be in person. I would highly not recommend this option because you may forget, spelling disaster for your finances. You can also pay through an online system or my favorite, an automated repayment system. However, the lender has to get approved to take the money straight from your bank account. If not, then it is illegal. The lender should always give you a form of authorization for these recurring debit transactions.
Repossession of your car
Ah, this is the worst of all! Repossession! We have all seen the TV shows of cars being repossessed. Do you want that to be you? I hope not! Not only will you become immobile because your car was taken from you but you will also miss out on the amount your car was worth at the time of repossession. In other words, the amount you could have sold the car for will be a sunk cost. This is why it is so important to stay up on your payments. Want to try and steal the car? Good luck. Many cars with title loans have GPS' installed in them making them impossible to steal. This gives your lender quick access to it. Some companies also put starter interrupt devices on the ignition, making it impossible to start your car. All in all, repossession is what you really don't want!
Alternatives for car title loans
In the end, there are so many better options that car title loans with expensive interest rates. Am I saying that car title loans are bad? Heck no! They allow you to get the car you want when you want it. Just make sure you can pay the hefty price tag. One of the best alternatives to a title loan would include buying a car with straight cash. This is what I have done and it is what I will continue to do. In my opinion, new cars depreciate way too fast for my likings especially luxury cars like BMWs, Mercedes, Audis, and the many other foreign cars on the market. If I was you and had a decent amount of money saved up, I would get a car that is three to five years old and is a really good deal. Make sure that it has a clean history and that is has been well maintained. If you can't buy it in full with cash, put a hefty down payment on it and finance the rest. Your payment should only be around $100 to $200 dollars a month not including insurance.
If you want to finance a car with a bank loan, that is fine too. Just calculate the payment and make you will be able to pay it every month. I would definitely make a budget when dealing with large transactions like car purchases. It keeps you financially stable and allows you to keep really good attention to your finances. In the end, go with title loans Charleston if you are looking for a great deal!
Fill out the form and find out how much you can get on your car title: