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6 Things To Think About Before You Get A Car Title Loan

Car title loans are a quick solution when you’re in need of cash, and your bad credit doesn’t allow you to use your credit card anymore. Getting a loan with your car title is fast and doesn’t require painful procedures.

In most cases, you can do the paperwork online and have the money you need by the end of the day — supposing you live in a state where these loans are allowed. For example, you can get a car title loan in Riverside in less than a business day. But, if you live anywhere in Colorado or Florida, you need to find an alternative source of money on the fly.

However, a APR refers to the annual rate you’re going to be charged for the service. It’s the indicator that allows you to measure how expensive the title loan is compared to other loans.

Your lender should write in your contract the interest rates, all the fees that come with the loan, and the APR. Car title loans cost less than payday loans, for example. But, they’re still a lot more expensive than credit cards, as their APRs can get as high as 300%.

As a guideline, 36% APR is the upper limit for ‘affordable’ loans. Everything higher than that and you risk being dragged in a cycle of debt. Remember that if you can’t pay off your credit, you can lose your car.

What Payment Options Do You Have?

When getting a loan, you should pay attention to what payment options you sign for. Lenders give you various possibilities, from paying in person or online to paying directly from your paycheck.

Before signing the contract, make sure you know how long the loan would last. Plus, it’s essential to have a clear image of what amount you must pay each month and when the lender expects you to make these payments.

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It’s important to check that your monthly payments include a part of the principal. This way, you make sure you pay off your debt by the end of the contract.

6 and 11% of people who secure their loans with a vehicle end up with having their cars repossessed.

Do a realistic budget to check if you can keep up with the A car title loan can get you out of trouble when you’re in desperate need of money. To keep things that simple, you need to find the right lender. This way, you’re more likely to pay off your debt and don’t risk losing your vehicle.

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