Doing car title loans correctly requires knowledge of your state’s collateral loan industry. Some companies that provide car title loans in Arkansas have stellar reputations because they help customers manage difficult financial times. Others talk about a good game but charge outrageous fees to get to the next payday. There is a right way to handle a car title loan and a wrong way. This short step-by-step guide overs doing car title loans the right way.
Know And Understand Your Credit Score
The car title loan industry can attract business owners who exploit people with bad credit. Remember this as you shop for a car title loan, and you can turn the tables on them.
Your best defense is knowing the law and how car title loans work. You can avoid paying higher interest rates by managing these loans carefully. It’s also a good idea to investigate the laws in your state governing the title loan industry.
Make a Plan
If you’re looking for a car title loan, you likely need something in the short term. To avoid inflating a short-term concern into a long-term nightmare, it’s critical to have and institute a plan to repay the loan quickly. A fifteen-day loan is best. However, the thirty-day maturity loan is expected. The point is, go up to thirty days maximum.
Car title loans use the titles of vehicles for collateral. Understand what this means to your transportation situation. This type of lien against your title to your car means they can force the sale of it to recoup their monies if you fail to make the payments as agreed. Make a plan you can stick to without going past the due date. In other words, be really honest with yourself about what you can comfortably afford.
Once you know how to spot a predatory car title loan, you can start shopping for one that fits your needs. In most states, the car title loan industry operates under rules restricting fees and interest rates. All car title loan companies in your state should have rates and fees similar to each other but just different enough for healthy business competition.
Any company outside the normal range of highs and lows could offer something they can’t give or not tell you the fine print. Reputable car title loan companies post customer reviews and information about the healthy use of credit on their websites. Reputable means they don’t encourage lousy credit habits like rolling over fees and interest charges.
Timing Is Everything
Start and end the loan at times when it helps your financial situation. For example, automatic payment withdrawals from a monthly or weekly deposit are a great tool for paying off your loan. However, it would be best if you were careful to avoid scheduling payments between your paychecks.
The key to doing car title loans correctly is understanding what caused you to need the cash in the first place—and taking steps to avoid repeating that situation.
And second, being very sure you can meet the loan terms the first time around. The more times you carry the loan over, the more expensive it will become.
Car Title Loans The Right Way: In Summary
Car title loans have a bad rep. However, that doesn’t mean they are all bad. Conducting due diligence to ensure you’re working with a reputable lender and doing everything possible to meet the loan agreement terms will make a car title loan pay off, rather than cost you.