A loan gives you access to capital that you could use to pay for your mortgage, car, children’s education, or an existing loan. A loan could save you from an ongoing financial crisis or even help you start a business. With the right loan provider, acquiring a loan is truly beneficial. However, the trouble will come hunting you down if you fail to understand the whole dynamic and logistics of what you’re getting into. You might even suffer from bankruptcy or worse, face legal actions.
This is probably what makes you doubt about resorting to a loan product when money’s tight. You might also be worried about being denied a loan application because of your low credit rating, which could in turn, damage your credit even further.
The thing is, you don’t have to be easily discouraged because there are already numerous ways on how you could secure a loan even with poor credit rating and at the same time, avoid getting caught up in further financial troubles. This is surely not the first time you’ve heard about a title loan, which is the perfect answer for your dilemma. Are title loans Safe? Let’s find out:
Defining a Title Loan
An auto title loan is one of the most common types of loans available in the market today. What makes it a hot product in the industry is that, while it may review your credit history and income background, your credit rating will not become a factor in the approval process. Because of this factor, auto title loans tend to be a swifter process than financing through another financial institution. An auto title loan sees you putting up the title of your vehicle as collateral during your loan payment period.
How Auto Title Loans Work
It shouldn’t be a surprise that the asset that customers have to relinquish as collateral for their auto title loan is the title to their vehicle—it’s in the title.
As previously mentioned, applying for a title loan is simple (especially with LoanMart). All you have to do is sign over a few documents so that your lender becomes the lien holder of your vehicle. In some case, you won’t even be asked to turn over your vehicle, allowing you and its fellow customers to have free reign over their vehicles during payment periods.
Car title loan amounts vary, depending on the programs offered by lenders. Similarly, there are various loan repayment schedules that are implemented. There are those that require a one-time loan repayment after a certain period of time; and there are also those that provide installment options over the course of a year or two, which are ideal for a much more substantial loan.
While most borrowers work with their lenders on their schedule and make timely payments, there are some cases that don’t always end up happily ever after—regardless of the repayment plan agreed upon, your failure to meet your end of the deal will result to your car being repossessed by the loan provider. If you are lucky enough, you could come up with a compromise with your loan provider.
Things to Remember
Now that you know the groundwork a little bit, you are probably more knowledgeable, armed and ready to apply for a car title loan—knowledge is essential, confidence is key. To make sure that you get the most out of the borrowing experience without any hiccups with your assets, here are some helpful tips you need to keep in mind:
Do I Really Need the Money?
One thing to be sure of, especially if you’re a first time borrower, is that you truly need the loan you’re applying for and that the financial situation you’re in is one that you absolutely need a helping hand for. You don’t want to put your reputation and your assets on the line for petty cash problems. If your financial issues can be resolved by simply managing your finances better, you might want to think twice about getting a loan, and perhaps consulting someone. However, if it’s your business suddenly going down and you need access to immediate financing to save it or if it’s a family member with expensive hospital bills and medicines, car title loans are definitely worth the investment.
Repayment Schedules & Application Requirements
As a consumer, you only want the best product available in the market. More often than not, there is a huge catch waiting for you at the end of the bait. However, with LoanMart, this is not the case. The application process is there to find the right loan for you. All applications with LoanMart are free and lack all of the credit application fees that other financial institutions may exhibit. Customer service representatives are knowledgeable and efficient, and always there to help you get more information. Despite the urgency of your monetary needs, it is important to always be smart and well-informed.
To submit an application, a valid form of identification will be needed, as well as proofs of income & residency, so that LoanMart knows that you aren’t a bad bet. The vehicle (as well as the title) comes into play as a means to determine how much your loan will be worth when compared to your income. Your representative will walk you through the steps of it all and even explain to you what repayment schedules would work best for you, in terms of interest and length. It will only take you a few hours or less to complete your car title loan application.
Everything’s easier with the digital revolution, as applications and payment schedules can be made online—this will save you the hassle of going to a brick-and-mortar office and lining up for long hours just to file it.
Interest Rates and Fees
There are some loan providers that charge processing fees. Of course, these are not usually stated in their promotional materials such as online ads, brochures, and infographics, among others. Should your loan application be approved, you would no longer be surprised to be charged a processing fee. This is not the case with LoanMart.
Many loan providers bank on the loose requirements to take advantage of desperate borrowers. Because of these greedy lenders, the usual annual percentage rate (APR) on a mere one-month car title loan is at 300%. However, do not be bothered. There are still a number of loan providers (such as LoanMart) that offer the lowest interest rates, upholding the value of fairness to borrowers. Keep in mind that you’re already offering a collateral, which means that there’s no need for lenders to impose tremendously high interest rates.
It is a surprise if a lender comes to an impasse with a customer and repossession actually happens. One way to determine whether a lender really caters the best interests of its customers is its repossession rate. If there’s a way you could ask the average number of cars repossessed by a loan provider annually, do so. The lower the average number is, the better. Why? It’s a sign that most borrowers are able to settle their loans because that particular loan provider are governed by customer-oriented policies. It could be that they have more flexible repayment options or their services are deeply tailored for every client or they offer knowledgeable financial guidance and advices.
Loans and Laws
Admittedly, some title loans and their brokers are not closely regulated. This makes it easier for some loan providers to creatively get around the laws governing the industry without actually breaking anything. A lending company originally located at a particular state may refer you to one of its lending arms located outside the limits of the federal and state laws, offering more viable financial solutions to you.
In line with this, opt for LoanMart that strictly adheres to federal and state laws. Obedience to these laws is a sign that a lender only has the best interest of borrowers in mind in terms of practices within the industry.
Are Title Loans Safe?
The ultimate truth is that no type of loan is ever safe unless you are willing to commit yourself into making good on the terms and conditions you signed up for. As long as you are a responsible borrower who fully understands your financial decisions and that you have a trustworthy loan provider who will help you out in every way possible, there is no need to worry about getting caught in the middle of grave financial burden. While there may be a couple of opportunists willing to take advantage of your desperate situations, there are still a lot of loan providers whose only goal is to help you get back on your stable financial footing.
At LoanMart, we want to help you find the best solution to help you get the most out of your vehicle and to make it through a tough situation. To get started on your application today, visit our website or call us at 855-422-7412.