A car title loan is a loan where a car is put down as collateral. Before taking out a car title loan there are a few things one can expect out of the title loan process. If an individual is looking into obtaining a car title loan then it may a good idea to understand the basic steps of the process, as well as what the title loan lender will expect from the borrower.
What to Expect When Researching Car Title Loans
When researching car title loans, many names will come up. Title loans are called by many names, including auto loans, car title loans, pink slip loans, auto pawn loans, or some variation of these terms. These terms mean the same thing and they all have the same process. When looking into obtaining a title loan, one may find that title loans are accessible to a wide range of groups including people with poor credit, those who have no bank account, and those without a social security number.
What Items/Information Should I Have for A Title Loan
In order to obtain a title loan, a person will be expected to have the following documents on hand:
- A state I.D. or driver’s license
- Proof of income
- Title to a qualifying vehicle in their name
- Vehicle inspection (in-person or via pictures)
What Can I Expect for The Value of the Loan?
The value of the car title loan is largely determined from the value of the vehicle. To determine the value of a car, the make, model, year, and mileage will all be considered when coming up with approximation. In addition to this, lenders will also look at income and the ability to repay. Once they consider all these factors, they will offer a value for the loan.
Length of the Process and Funding
The car title loan process can be extremely fast, especially when compared to traditional types of loans. Funding for title loans may be available the same day or in the next twenty four hours. In addition to fast funding, title loans are convenient. Most of the time signing up for a title loan can be done entirely without leaving home.
Where Can I Get A Title Loan?
Many states in the U.S allow for title loans but there are some states that don’t. If title loans are allowed in the state, a resident can begin to look at lenders. There may be several title loan lenders available in a single area. In addition, there are title loan connection services, who do the loan searching for people. Every lender is different so it is important to look around before signing up.
What Kinds of Interest Should I Be Expecting?
There are two kinds of interest rates when it comes to car title loans. The MPR (monthly principle rate) and the APR (annual percentage rate). Expect the interest rates to be extremely high because of the risk that title loans carry. Interest rates on title loans could range from around 200% to 300% of the loan. Most of the time, interest will only be shown in terms of the MPR. This is because lenders are not obligated to present the APR interest. The APR is just the MPR added up, and it should be looked at and considered before signing a title loan agreement.
What Kinds of Additional Fees Should I be Expecting?
Title loan lenders must be transparent about the entire cost of a loan before a contract is signed. The only additional fees that may come up are late fees (which should be stated), or rollover fees. In the loan industry, a rollover fee is a charge for when a monthly payment is deferred. The amount of the rollover fee depends on the lender.
What Expectations Are Set Out For Me?
Here are a few loan expectations for borrowers:
- Financial Transparency -The borrower should let the lender know if they are having financial hardships and cannot pay their loan. Most title loan companies will work with their borrowers to make sure the loan is not defaulted.
- Make Payments on Time – Once a repayment plan is agreed upon, lenders expect the correct payment amount on the agreed upon monthly date.
- Cooperation – If the loan defaults, the lenders expect borrowers to follow the rules of the contract even if that means giving up the vehicle for repossession.
Before looking into a car title loan, it is important to know what to expect throughout the entire process. By following the expectations agreed upon, both parties benefit in the title loan process. Once the loan is completely paid off, the lender will remove themselves from the title and the borrower regains complete ownership of the car again.
Max Cash Title Loans may be able help connect you with a title loan lender. We are a knowledgeable team working to keep customers informed about what to expect before, during, and after the title loan process. Get in touch with us via phone: (855) 561-5626 or by email at firstname.lastname@example.org.