What You Need to Know About Title Loans

title loans

What You Need to Know About Title Loans

Taking out title loans can be an excellent way to get cash. However, it’s important to understand all of the terms before deciding which one is right for you. Title loans offer repayment terms of two to seven years, and many of them carry high APRs.

Short-term length

Taking out a short term title loan can be a good financial decision. The stipulations vary from state to state, but in most cases you’ll be required to pay back the money you borrow. This can be a pain in the behind, but it’s also a necessary evil. Plus, you may need the money to buy your dream car or cover some other emergency expense.

As for the actual loan, you can expect to pay something in the ballpark of five hundred to a thousand dollars. It’s also worth noting that you won’t have the benefit of a credit check or repossession if you default. Similarly, you’ll be subjected to penalties for late payments.

The best part is that you’ll probably have fun if you do. You can even roll over your current title loan to a new one.

High APRs

Whether you’re looking to purchase a new car or need a quick cash advance, you can get a title loan. However, these loans come with high APRs.

While they may sound attractive, title loans can be expensive and can lead to you getting deeper into debt. Before you get a loan, check out the APRs on title loans and compare them with your credit cards. You may be able to get a better deal on a credit card and avoid a title loan altogether.

The APR is a term that measures the cost of the loan, including interest, credit costs and miscellaneous fees. If you have a $500 car title loan, you will pay around 25% per month in interest. The total APR of this loan will be around 300%.

GPS device to prevent your car from starting

Using a GPS device to prevent your car from starting with title loans can be a lifesaver if you’ve been in the position easy cash loans of needing to borrow money to buy a home, pay off debt or put your kid through college. However, it’s also a great way to keep your car from being repossessed if you’re the type who has a bad credit score.

It’s not uncommon to see GPS devices in a number of “Buy here, pay here” lot locations. They’re a bit more discreet than the traditional repo man. Some dealers may even offer free removal service once you’ve satisfied your loan.

The GPS device that’s most likely to be mentioned is a GPS/immobilizer unit placed in your vehicle by a financing company. The unit is small enough to fit under the dash and can be removed with minimal fuss.

Avoiding a title loan trap

Using a title loan to finance a car can be a big mistake. In fact, consumers often get caught in a debt cycle. The loan is expensive and has a short payment term, making it difficult to pay off. In addition, interest rates can be as high as 300%.

Title lenders often make their money by charging fees. These fees are often added to the title loan interest. In some states, title lenders are required to check your income. However, in other states, they are not. Nevertheless, you should always check your loan terms.

If you are considering using a title loan to finance a car, you should take some time to think about the consequences of not paying the loan. There are penalties for failing to pay, including being jailed for contempt of court. You can also lose your motor vehicle. This can interfere with your access to work and school.