Getting a “quick auto loan” if you have a vehicle that you either own outright or owe very little on may be simple. Fast and simple, on the other hand, do not always imply quality. This sort of loan will cost you a lot of money, and you run the danger of losing your automobile. Before you take out a vehicle title loan, here are three things you should know and several options to consider.
Your vehicle must have either a clear title or at least some equity, to qualify for a car title loan. Pink-slip loans, “title pledges,” or “title pawns” are all terms for car title loans. The name “pink slip” is derived from the color of the paper used to print vehicle titles. Additionally, the lender will normally want a picture ID and evidence of insurance in addition to your vehicle’s title. The lender receives your vehicle title in return for the loan if you are authorized for a car title loan. Once you’ve paid off the car title loans, you’ll be able to obtain your car back.
Car title loans entail exorbitant fees and rates of interest.
Lenders often charge a monthly interest rate of 25 percent or more of the loan amount when offering a vehicle title loan. An annual percentage rate (APR) of over 300 percent is the result. Compared to many other types of credit, including credit cards, that’s a lot higher.
potentially lose your automobile if you don’t pay back a car title loan
You may be allowed to roll over a vehicle title loan if you can’t pay back the money you borrowed plus all of the costs. The amount you’re rolling over will accrue additional fees and interest as a result. If you are unable to pay back the auto title loan, the lender may repossess your vehicle. In addition to the past-due sum, you may have to pay additional costs to get the car returned. After all, if you fail to come up with a solution, you’ll be forced to locate (and pay for) another mode of transit.
A cash advance on your credit card
If you have one with a balance, maybe a better option than a vehicle title loan if you have an accessible balance. In contrast, cash advance APRs tend to be substantially higher than standard purchase APRs (some cash advance APRs are more than 27 percent). You should also bear in mind that a cash advance fee will be added on top of the APR. A 5% charge is not uncommon for cash advances.
Car title loans might be pricey, but there are cheaper options. Compare a few offers to obtain the best APR, and only borrow what you can pay back within the online title loans period if it’s your only alternative for quick cash.
While you’re waiting, work on improving your credit and creating a spending plan. Credit counselors are available to assist you to manage your debt and budget to prevent taking out vehicle title loans online, in the future.