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For someone who is considering taking a car title loan, you will be required to give the clear title of the car as collateral for the short-term loan. Other names that are used to refer to a car title loan are title pledge, pink slip loan, or a title pawn.
Other companies offer car title loans based on the equity of the vehicle or the clear title. The loans are usually for a month or less than a month. One must know that these loans have a higher rate of interest compared to other loans.
Only those who are able to pay back the loans should get this type of loans. The requirements for taking a car title loan are to fill a loan application form, bring the clear title, submit a photo ID, present the vehicle, show proof of insurance and submit a set of keys to the lender.
Those who apply for car title loans must review the loan terms before they sign for the loan. Before a client takes a loan, the lender must disclose late fees, document fees, processing fees, title charges, liens charges and loan origination fees so that the client is well informed about all the charges that are part of the loan. Some loans may have add-ons and borrowers must clarify with the lender whether there are such add-ons in one’s loan as this would raise the loan amount.
Applications for car title loans can be done through online platforms or through visiting a physical storefront that offers these loans. Only when the loan is paid off can a borrower get their car title back after submission during the approval stage. When one needs to make payments for this loan, they can do so through automated repayment systems, personally visiting the storefront with payment or through an online system.
Lenders may require a borrower to put up a GPS device so that they can be able to know the location of your car if they need to repossess it. Starter interrupt device may be installed on a borrower’s car so that a lender can be able to repossess the car if the borrower is unable to pay back the loan.
One can get an additional loan which comes with additional fees and interest to the amount originally borrowed if they cannot make payment within the loan period time. If one is unable to repay the loan, the lender will repossess their car. Before one decides to take a car title loan, they must carry out good financial planning to determine how they will pay back the loan in good time.