Title loans, since their inception, have been a helpful short-term loan solution for many people. As long as you are able to pay back what you borrow, these loans can really help you out when you are caught between a rock and a hard place. Yet, before you sign on the dotted line to get your money, there are four questions you should be asking yourself.
1. How Much Time Do You Have to Pay Back the Loan?
Some title loan terms say you have only a month to pay back the loan. Others will break up financing and loan payments over several months, even if you can pay it back in a month. If you cannot pay it back per the terms of the title loan contract, you should either look for a title loan place with more flexible terms, or not sign the paperwork.
2. How Much Interest?
You definitely need to ask this question. Some title loan places charge moderate interest, while others charge an enormous amount of interest. Some other title loan places do not charge interest, just a flat fee to borrow the money. You have to decide for yourself which of these fee/interest practices are best for your budget.
3. What Happens to Your Car?
Title loan places really do not want your vehicle. They want their money. However, some loan customers fail to make the payment(s) or repayment as promised.
Title loan contracts frequently structure their wording such that customers can still work things out before the title loan company claims the vehicle. Only a rare few title loan places allow you to keep the car but come after you to garnish your check. All of these details are in the contract if you take the time to read it before signing it.
4. Can You Sell the Car Without the Title?
Some people somehow manage to sell their vehicles without disclosing that there is a title loan lien against it. The new owner tells the DMV that the title is lost, so the DMV generates a new title. However, it often results in a duplicate "hit" in the system. Then the new owners are on the hook for the title loan if they want to keep the car.
The result is actually a case of fraud. People who are caught doing this are fined, or spend time in jail. Since the title loan people have a lien against the vehicle, and they also have a title that clearly states "lien" and "lien holder," the car cannot be sold until the title loan is paid.
Reach out to a company like American Cash Advance and Title Loan for more information.
Share7 September 2018
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