When one is looking for a short term loan such as a car title loan, they are required to give a clear title of the car as collateral for the loan. A car title loan is also known by names such as title pledge, pink slip loan, or a title pawn.
Other companies offer car title loans based on the equity of the vehicle or the clear title. The loans are usually for a month or less than a month. It is important that one knows that car title loans have a high rate of interest when compared to other loans.
Only those who are able to pay back the loans should get this type of loans. The requirements for taking a car title loan are 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.
Those who apply for car title loans must review the loan terms before they sign 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. Some loans may have add-ons and borrowers must clarify with the lender whether there are such add-ons in one’s loan as this would raise the loan amount.
One can apply for a car loan from an online platform or visit a physical storefront that offers car loans. One must leave their car title with the lender after approval of a car title loan and they will only get it back when the loan is paid off. When one needs to make payments for this loan, they can do so through automated repayment systems, personally visiting the storefront with payment or through an online system.
Lenders may need to repossess a car and this is why they ask borrowers to install GPS devices so that the lenders can always know where the cars are located. Other lenders may require installation of starter interrupt devices which will limit your ability to start the car in cases where they need to repossess the car.
People who cannot make payment within the loan period time may get an additional loan which comes with additional fees and interest, to the amount originally borrowed. Those who are unable to pay back their loans lose their cars to the lenders who repossess them. 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.