Unsure about how to be a dependable title loan holder? This article will help you make better title loan decisions, which if followed to the letter, would make you a responsible title loan holder.
Before you can become a responsible title loan holder, you must know how to become one in the first instance. A title loan holder is an individual who has secured a loan using his/her car title as collateral. These borrowers are mandated to allow a lender place a lien on their vehicle title, and temporarily surrender the original copy of their car title, in exchange for a loan amount.
When the loan is refunded, the lien is detached, and the car title is returned to its proprietor. If the borrower ducks on their payments then the lender is apt to repossess the vehicle and trade it to repay the borrowers’ outstanding debt.
These loans are short-term, and usually, lenders do not check the credit history of borrowers for these loans. They only consider the value and condition of the vehicle that is being used to secure it.
Most title loans can be acquired in few minutes and borrowers can get loans as little as, $100. Most financial institutions will not loan under $1,000 to someone without any credit as they deem these not gainful and too dangerous. Title loaning is not allowed in some states in America, but you can check to see if you can find a title loan location near you.
Although title loaning is a saving grace for people with poor credit, it demands a high level of responsibilities on the part of the title loan holder. Below are five things you can do be a responsible and trustworthy title loan holder;
Consider the pros and cons
As beneficial as getting a title loan might be, it also has its own risks. Of course, title loan companies do offer people an alternative when there are no supplementary and the lenders accept your application regardless of your past credit history.
This means you could be approved almost immediately but it’s better to think twice before opting in for a title loan because of the high rate of interests that accompanies such loans and the risk of losing your car, if you are not able to refund the loan.
So the first most responsible thing any intending title holder should do is to weigh the advantages and disadvantages of getting a title loan. After making your decision, you are good to move on to the next pertinent step.
Find a lending firm and ask for the interest rate
Finding title loans location near you is essential – but asking for the interest rate is more pertinent because no one wants to be involved in a response that is overwhelming. Depending on the state where the lender is located, interest rates might vary from 36% to well over 100%.
Reflect on your earnings and inquire for the payment schedule
It is necessary that you reconsider your earnings and see if you would be able to meet the deadlines stipulated. Payment schedules vary, but at least every borrower has to pay the interest due on the specified date.
At the termination of the term of the loan, the complete unpaid amount may be due in a single payment. If the borrower is unable to repay the loan at this time, then they can roll the remainder over, and subtract a new title loan. Government regulation often limits the total number of times that a borrower can roll the loan over so that they do not remain continually in debt.
Check your requirements, submit and apply
The lender’s requirement includes specific forms of identification such as a valid government-issued ID like a driver’s license, proof of income, some form of mail to prove residency, car registration, a lien-free car title in their name, references and car insurance, though not all states require lenders to show proof of auto insurance. After preparing the necessities, apply and wait for approval.
Once you’ve been approved for the loan, you should peruse the particulars before accepting it. Review the loan terms to make sure they hadn’t changed from what you thought they were when you applied. Sometimes, a lender will show the lowest cost, but you will be approved for a higher price. So be conscious of every detail before accepting it. If you notice a manipulation, it’s not too late to reject the loan. However, if the terms are ok by you, carry on: get the loan.
Refund your loan in due time
Paying back is the last act that determines how responsible a title holder is. Many individuals find it difficult to fulfill their end of the bargain because they felt relaxed after getting the loan and made little effort to pay back. Make sure you are keeping up with your payments or you could spend a long time repairing your credit. It is easier to collect a loan than to refund it but what separates a responsible titleholder from a “not so responsible” one is their ability to refund their debt.
Conclusively, do not bite more than you can chew. Do not borrow more than you have the capacity to refund. Getting a title loan you cannot refund, is as good as selling your car. Be wise!