If you're short on cash and you own your car, a title loan might be the way to go. Unlike payday loans that you need to pay off out of your next paycheck, title loans give you a longer repayment plan. Not only that, but title loans often give you access to larger sums of cash, which can be beneficial during an emergency situation. Here are four steps that will help you get ready for the loan process.
Get Your Car and Paperwork Ready
If you're going to be applying for a title loan, make sure you have everything ready before you apply. The first thing you want to do is have your car detailed. The loan company will be inspecting your car before they approve your loan. You'll want your car to appraise at the best rate possible. Having your car clean and detailed during the appraisal will ensure the best loan offer. Once you have your car ready for inspection, you'll need to get your paperwork in order. Be sure to have proof of income and address, as well as the actual title for your car. You'll need to prove ownership when before your loan will be funded.
Choose the Right Repayment Plan
When you apply for your title loan, make sure you choose the right repayment plan. You might think that extending the duration of the repayment period will save you money, but that's not necessarily the case. Lower monthly payments over a longer period of time may actually end up costing you more money, especially when you consider the interest rate. If you can afford higher monthly payments with a shorter repayment period, you'll end up saving yourself some money in the long run.
Understand the Loan Requirements
When you talk to the loan company about your title loan, you'll want to make sure that you understand the requirements. Most importantly, you'll want to find out if you can keep your car while you pay off the loan.
Ask About Early Payoff Penalties
If you plan on paying your title loan off early, you'll need to make sure there won't be a penalty attached to that decision. Some title loan companies charge a fee for early payoff. That fee is designed to offset the interest payments the company will lose when you pay off the loan early. Before you sign the loan documents, make sure you have the option of paying the loan off early.Share