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How do you find the best car title loan companies?
If you’re among the 2 million Americans who use car title loans every year, you have to know what to look for.
Car title loans are a great way to get fast cash to buy a vehicle, but unfortunately, there are a lot of shady car title loan companies out there.
They’re out to make a profit and will do anything to make money. Even if it’s unethical.
How can you avoid these unscrupulous companies?
Keep reading to learn how you can find the best car title loan companies that put people over profit.
What is a Car Title Loan?
A car title loan is a type of loan that uses your car title as collateral in exchange for a loan. It’s a smaller loan, ranging from $200 – $1500.
They can be a lifesaver if you’re in need of quick cash in an emergency situation.
The key is that you have to pay the loan back in full, typically within 30 days. If you don’t, you will be charged interest on the loan, and your payments will continue until the debt is paid off.
If you fail to make payments, the lender has the right to repossess your car and sell it. If the car is sold for less than the amount owed, you could be held liable for a deficiency judgment. That means you’ll still have to pay for the loan even after the car is repossessed.
Finding the Best Car Title Loan Companies
The best car title loan companies have something in common. They’re transparent in their process and they make getting a loan easy for you.
When you’re in need of quick cash, it can be very stressful. These companies walk you through the process and tell you exactly everything you need to know to make a good financial decision.
Do Your Research
The car title loan industry is dominated by three main players. It’s also a fragmented industry, and there are many independent loan companies as well.
Start with an internet research to find local companies in your area. You want to look for things like their lending practices and if they have a social media presence. These are early signs that they could be a reputable company.
Your next step is to see what others experience with the company was. Check with online reviews on Google, Facebook, and the Better Business Bureau.
You’ll want to check not only if there are good or bad reviews, you’ll want to check their BBB rating. Note how the company responds to bad reviews.
Do they go out of their way to solve issues, or do they blame the reviewer for the issue? Do they respond at all? These are clues has to how the loan company operates.
What are the Terms of the Loan
Title companies differ in how they offer car title loans.
For example, some loan companies have the terms of their loans right on their websites. They’ll offer minimum terms of 12 months and spell out interest rates and what your total payments are for a $1000 loan.
This type of disclosure can put you at ease because there is transparency. You can then know and understand what the terms of the loan are and your responsibilities to pay the loan back. You can discover more here
You’ll want to know if there are prepayment penalties, what the interest rate is, and what the total loan payment is if you pay it off on time.
Be sure to ask what the payment will be if you don’t pay the loan back in 30 days.
Call and Ask Questions
The type of service you get from a lender can set the best car title loan companies for everyone else. You can’t really get a sense of a company unless you call to ask questions.
Ask about the terms of the loan. Also, ask if there are any restrictions on the type of cars that lenders accept.
Check to make sure that you can continue to drive your car during the life of the loan. There are companies.
Does the car title company force you to purchase their insurance in order to get the loan?
When you get the answers, take careful notes, and write down the name of the person you spoke with and when.
You want to be sure that what the representative said and the terms of the loan match. If they don’t, then you’ll be wise to walk away.
What Can You Do to Protect Yourself?
A recent study noted that 1 in 5 cars on car title loans are repossessed.
The main reason why is because car title loans are meant to be short-term, single payment loans. If you don’t pay the loan back in one payment, you’ll be charged incredibly high-interest rates, that could force you to take out more loans to repay the first one.
The first step that you need to take is to set a budget for yourself. There are things that you can do to help you manage your debt.
Yes, you might need a car, but you need to make sure that you can take care of your financial obligations and pay the car title loan, too.
Finding the Right Car Title Loan Company
The best car title loan companies can be difficult to find in a predatory environment. There are some car title loan companies that give the entire industry a bad name.
There are also companies that are above board and put people first. Those are the companies you want to work with.
They’re transparent, they have great reviews, and they’re easy to work with. They’re also willing to work with you if you get in trouble with your loan.
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