Car title loans are obtained by using the vehicle’s title as collateral. When looking to take out a car title loan, it is important to look at the interest rate being charged. The interest rate will determine the full loan amount that a borrower will end up paying to the lender. Car title loans are known to have a significant amount of interest to them and it is important to compare several lenders to get the best interest rate.
The Types of Interest Associated with Car Title Loan Loans
When it comes car title loans there are generally two types of interest rates to pay attention to:
- Monthly Percentage Rate – The MPR will be charged every month.
- Annual Percentage Rate – The APR is the amount of interest for the year, it should equal whatever the total MPR is for the year.
Most car title loan lenders will only show the borrower the interest in terms of the MPR. This is because the APR may seem extremely high. As a borrower, it is crucial to know how much a loan will cost all together and to weigh out its worth.
Why Is the Interest on Car Title Loans So High?
Interest rates on car title loans could be extremely high. Interest rates on car title loans may range from an average of 200% to 300%. Compared to traditional loans, whose average interest rate ranges from 5% to 30%. Car title loans may have a higher interest rate when compared to traditional loans, but there are a few reasons for this:
- They may disregard bad credit or bad credit history5
- Car title loans are usually shorter (typically between 15 to 30 days)
- Title loans may be a high risk for lenders
The Best Way to Navigate a Car Title Loan in Terms of Interest
Interest builds up monthly and annually. Sometimes loans have a fixed date, while other times there may not be a specific date to pay back the loan. Some lenders even allow for rollovers, meaning if a borrower is not able to pay back the loan for the month, they could pay a fee to extend the due date.
A good thing to remember when it comes to loan interest, is that generally the longer it takes to pay back the loan, the more interest will accumulate. Paying back the loan as quickly as possible could save a person thousands of dollars. Comparing lenders may help you find the best repayment plan to keep the accumulated interest low. In addition, drawing comparisons may help you find the best terms fit for your unique situation.
How to Get the Best Interest Rate for A Car Title Loan?
A good way to ensure receiving the best interest rate on a car title loan is by comparing several lenders. Each lender works differently, and some may have offer better interest rates than others. It may be helpful to know that monthly income may impact the amount of interest on a car title loan.
At Max Cash Title Loans, we are a free loan processing service that connects people with reputable lenders. At Max Cash Title Loans, we filter through hundreds of lenders to find the one that offers the best interest rate.4
How to Get A Car Title Loan Through Max Cash Title Loans?
At Max Cash Title Loans, we are a free loan processing service that connects people with title loan lenders. We service people across the United States and work with hundreds of trusted lenders. To get started with a car title loan through Max Cash Title Loans, a few things are necessary:
- State I.D. or driver’s license
- Proof of income
- Title to a qualifying vehicle in your name
- Several pictures of the car
Once we have these documents, we begin the search for a lender. To begin the process, reach out to us via phone (855) 561-5626, email email@example.com, or visit our website to complete our online inquiry form and receive more information.
When taking out a car title loan, it is extremely important to pay attention to the monthly and annual interest being charged. There are a few reasons why interest rates on car title loans may be so high, but it is mainly because the lender is taking a risk when giving out these types of loans. To reduce the amount of paid interest, it may be helpful to try to pay the loan off as soon as possible.
To make sure you are getting the best interest rate on a title loan, it is extremely important to compare several lenders. No two lenders are the same. At Max Cash Title Loans, we work with hundreds of lenders across the United States. Because of the variety of lenders that we offer, we may be able to find you the best interest rate on car title loan.2 4