Emergencies come unexpectedly. They could be major or minor, but sometimes they present themselves just when you don’t have enough cash to deal with the situation. Thanks to the existence of money lenders in most states, you can get yourself out of some of these emergencies without having to sell your liver or go insane about your situation! In Arizona, it even gets better if you have a valuable asset. If that asset is a car, the folks at FTR provide some of the best Phoenix title loans you can consider to get your emergency issue handled. In other words, this is where you use your car title as collateral for the money you borrow.
As some like to call it, a ‘fast auto loan’ enables you to secure money fast to tackle an emergency or an urgent need for cash. It especially comes in handy when the unforeseen strikes and you don’t have enough money to cater to the specific need. But is it always a bed of roses? Well, there is only one way to find out, and this is where you are urged to keep reading.
Before deciding that a car title loan is exactly what you need, there are a few things you need to keep in mind. You generally need to understand the requirements, risks, benefits, and alternatives, if any. This is not to mention the loan interest rates, the fees, and the slight possibility of dealing with the wrong people. Without further ado, here are some three things you absolutely must know before you decide to get a car title loan.
1. You Need to Own the Car or At Least Have Equity on It
For starters, it is worth mentioning that some of these loans also apply to other types of vehicles, including trucks, motorcycles, boats, and campers. When you decide to take a car title loan, one thing is for sure. It means that you have decided to use your car as collateral, meaning that the lender can claim a lien on your car or even auction it to recover the borrowed money. However, don’t expect to get approval for your loan just by presenting a car. For you to qualify, you must have 100% ownership of the car.
To get the car title loan, you will need a clear title without any liens. Some lenders will require that you have considerable equity in your car. Most of them will need more than just the car title. You might be required to show the car, your ID as well as proof of insurance. You also have to prove that you are a resident of the area or region you are getting the loan from. To sum it up, some of the things you might need when seeking a car loan may include:
- Car title
- Car insurance document
- Vehicle registration
- Proof of identification
- Residential address proof
2. Title Loans Can Be Costly
Most of these loans are short-term, lasting usually between fifteen days and three months. With this being the case, it is not uncommon for the lender to hit you with an interest rate of about 25 percent a month.
This would translate to an annual percentage rate of 300 percent. That is way too high even when compared to other forms of credit. When getting this loan, take time, and compare different lenders to make sure you are getting the most favorable deal.
3. You Could Lose Your Car
This one is pretty obvious. If you don’t repay the loan at the agreed time, you may end up losing your car partially or completely to the lender based on the terms of the loan. In most cases, when you don’t repay the loans within the agreed timeframe, the lender can easily roll over the loan into a new one.
When this happens, the interest rate increases as well as the fees you were to pay. If you continue rolling over the loan, the amount could end up becoming so high that it’s impossible to repay it. The only option left at hand at that time would be seizing your car or vehicle. It’s best to look for other options before opting for this loan as it’s very likely that you could lose your car.
Car title loans, like all other loans, may seem like an easy way out of financial constrictions. If you are opting for it, think again. The above information should help you decide if indeed it could help you or make your life harder.