If you’re one of them, you have to look at all of your options to get cash, including car title loans.
You’ll need to compare car title lenders before you sign a loan contract. What should you look for in a car title loan estimate?
Read this article to find out.
1. The Amount of the Loan
A car title loan estimate is based on a number of things. You have to own the car to get a car title loan. Some lenders let you get a car title loan if you still owe money for the car.
If you still have an outstanding loan against the car, your loan is based on the amount of equity you have in the car.
Aside from the ownership, the value of the car is another consideration. The higher the value, the more you can borrow. Car title loans range between 25%-50% of a car’s value.
Your ability to pay for the loan is the final consideration. Take the time to know more about a car title loan and the car title loan requirements before you apply.
2. The Terms of the Car Title Loan
What else do you have to look for in a car title loan estimate? The terms of the loan. The terms of a loan contain the payment schedule.
Car title loans are short-term, so you’re expected to pay back the entire loan and fees within 15-30 days.
Let’s say that you borrow $1,000 and the terms are 30 days. By the end of the 30 days, you have to pay back the $1,000, plus interest and fees. That could be an additional $200 or more.
Lenders might have a grace period, which is a period of days after the due date to make your payment. Read your loan documents carefully and understand exactly what you’re signing.
3. Additional Fees
Car title loan estimates should have transparency around the fees for the loan. Look for line items for these fees.
Lenders add documentation fees, origination, and administration. There may be other fees associated with the car title loan.
4. What Happens to Your Car?
There are two things you need to know about your car before you agree to a car title loan. The first thing is if you’re able to drive your car while you have the title loan. In most cases, lenders let you drive the car with the loan outstanding.
The other important detail to know is what happens if you don’t pay your loan on time. The lender has the right to take your car.
If your car is repossessed, you have to pay more fees and the amount of the loan to regain possession of your car.
Understanding a Car Title Loan Estimate
Car title loans are an easy way to get cash. If you don’t carefully read the car title loan estimate, you could end up without your car.
Now that you know what to look for in a car title loan, you’re ready for more car tips. Check out the other articles on the blog today!