Before you apply for a car title loan, make sure you know your needs. How much you need to borrow, how long you need it for, and the interest rates you can expect are all things that you should consider before making the final decision. Some companies will encourage you to borrow more than you need and entice you with the promise of a higher interest rate if you pay off the loan later. But be aware of the brokers at USInstallmentLoans; they will be working for your best interests.
Ask if It’s the Monthly Rate or the APR
APR stands for Annual Percentage Rate. The APR will tell you how much interest you’ll be paying over the entire life of the loan. The average APR for a car title loan is 300 percent. If you have to pay off the loan in a year, you’ll end up paying $4,000 for the loan, including interest and the principle.
Always read the fine print and ask if it’s the APR or the monthly rate. Many car title loans are notorious for their deceptive fine print. The worst part is the “rollover” clause, where your debt keeps compounding and you end up with a new loan with even higher interest. It’s no wonder consumers get trapped in this cycle, with interest rates so high they can’t afford to pay them back with a reasonable income.
In addition, the APR is often higher than the interest rate on a traditional bank loan. Depending on the state you live in, you may have to pay as much as 300% of the loan’s principal within a year. To make matters worse, car title loans are often only available for a short period of time. A loan with a three-month term will require you to pay $1,250 within 30 days.
Negotiate a Better Payout
The key to negotiating a better payout when getting the best car title loan is not to accept the first offer you receive. Most title loan lenders will counteroffer with a higher payout if you miss a few payments. However, you should never accept a high-interest rate without first assessing the terms and conditions.
If you do miss a few payments, a high-interest rate means you will end up paying more to the lender in the long run. Using your negotiation skills, you can also ask for a higher payout if you have a side-hustle.
Check Your State’s Eligibility Before Applying for a Car Title Loan
You may be wondering how to get a car title loan. While it can be quick and easy to apply online, there are several requirements to meet before you can be approved for a title loan. First, you must be 18 years old and the owner of the vehicle. You also need to present your government-issued ID, as well as proof of income.
Some companies accept benefit payments as proof of income. Most importantly, you must be a resident of the state in which you’re applying for a car title loan. There are several states that have banned this type of loan, and you need to check your eligibility before applying.
Once you’ve verified your identity and income, you can begin the application process. You’ll need to submit two forms of identification: your government-issued driver’s license or a state ID. You may also need to provide proof of residency, such as a current lease, phone or utility bills, or other official documents. These documents should match your name and address on the vehicle title. Finally, you must be at least 18 years old to be eligible for a title loan.
Be on Time With Payments
Car title loans are not for everyone. Despite the fact that title loans are popular, they can come with high interest rates. While they may be easy to obtain, a poor credit score can lead to a disastrous situation. Luckily, there are other ways to get cash when you need it, such as secured loans with affordable APRs and realistic repayment terms. If you choose the wrong lender, you could find yourself deeper in debt or end up without a car.
Paying off your car title loan early is the best way to get the lowest interest rates. Since title loans are usually short-term, the interest rates can be high. You can expect to pay up to 15% or 20%, which is why it is best to repay your loan as soon as possible. Interest rates can skyrocket if you wait too long and need to extend your payments. Thus, paying off your car title loan as soon as possible is the best way to get the best deal.
