Car title loans are short-term loans that use the clear title of your car as collateral. Other names that are used to refer to a car title loan are title pledge, pink slip loan, or a title pawn.
One can get a car title loan on the equity of their vehicle and not on the clear title if they don’t have one. The loans are usually for a month or less than a month. One must know that these loans have a higher rate of interest compared to other loans.
These loans are not suitable for all individuals especially if one will be unable to pay the loan after a month. When one takes this loan, they are required to fill a loan application form, bring the clear title, submit a photo ID, present the vehicle, show proof of insurance and submit a set of keys to the lender.
When one is taking a car title loan, it is important to review the loan terms before signing for the loan. Before a client takes a loan, the lender must disclose late fees, document fees, processing fees, title charges, liens charges and loan origination fees so that the client is well informed about all the charges that are part of the loan. People who wish to take car title loans must ask the lenders about add-ons that are included in the loan because they normally raise the amount to be paid back.
Applications for car title loans can be done through online platforms or through visiting a physical storefront that offers these loans. Only when the loan is paid off can a borrower get their car title back after submission during the approval stage. Automated repayment systems, personally visiting the storefront with payment or through an online system are the methods that people use for making repayment of the loans.
Lenders may require a borrower to put up a GPS device so that they can be able to know the location of your car if they need to repossess it. Starter interrupt device may be installed on a borrower’s car so that a lender can be able to repossess the car if the borrower is unable to pay back the loan.
In case one is not able to make payment within the agreed period for the loan, they may get an additional loan which comes with additional fees and interest on the amount that was originally borrowed. If one is unable to repay the loan, the lender will repossess their car. People who want to take out car title loans should have good financial planning so that they will know how they will be able to pay the loan back in good time.