Nobody wants to take loans, but sometimes you don’t have any other option. There have been too many horror stories where people have taken loans and failed to pay them back. The consequences are way worse, and they collapse.
However, these horror stories should not intimidate you because many safer loan options are available. A title loan is one of the safe loan options where you don’t have to worry about dealing with additional charges. You can keep driving your car as long as you pay installments on time. However, there are a few things to consider when opting for car title loans.
What is a Title Loan?
If you have a weak career moment, you better familiarize yourself with a few loan options. Title loans are where you keep your car as collateral. You get a loan that is lesser or up to your car’s value. The best part about car title loans is keeping the car throughout until you fail to pay an installment. You also get to choose from the installment plans according to your convenience. The financial institution may keep the copy of car paper or original ones until you pay the loan.
5 Things you must Consider Before Getting a Title Loan
Before getting a car title loan, you must familiarize yourself with its work and the requirements. Here are five things you must pay attention to, especially when getting a loan in Virginia.
The Car Should be in Your Name
If you plan to use your friend’s car or your family’s car to get a car title loan for yourself, it’s not going to work. The car you decide to use must be under your name, and you must have proof to show that.
Before applying for the loan, make sure you have all the documents as solid proof. It is one of the crucial requirements to process the application. Your word won’t matter for a loan; you need to provide all the necessary evidence. Hence, you must get all the documents ready before time.
The Loan Demand Should be Equal to Car’s Value
Many people don’t know how much they can demand when taking a car title loan. The loan should be equal to or lesser than the demand for your car. There are a lot of agencies that evaluate your car’s value for you.
It is better to do your market research and then quote a price for the loan. It is the better way because the chances of your loan getting rejected are significantly less. Before the loan is granted, you need to take your car for a quick inspection by the lending agency. Before taking your car for inspection, ensure its windows are clean and in the best shape.
No credit check is essential
One of the main concerns of people when applying for loans is their credit history. While it is essential to maintain good credit history, sometimes, a few things are inevitable. If you have an average or a bad credit history, you don’t need to worry.
Your credit history plays no role, and you can take a title loan with no income verification. You will get the loan if you have proof that the car is yours. Hence, running around trying to fix your credit history is not an issue anymore. Also, the added charges are lesser than what most people have to pay for other loan types.
You have to decide how to pay
Unlike payday loans, where the payback period is shorter, you can choose the installment plans yourself when taking a title loan. Some financial institutions provide you with an extensive installment plan and a few of their policies. You can choose a plan that best suits your financial capabilities.
When applying for a loan or choosing an installment plan, it is better to play safe. Always try to figure out what your income can cover and any emergency funds you have. An alternative plan will ensure you have enough to cover each month’s installments.
Keep using the car
One of the main concerns of people, when they apply for a title loan, is whether or not they can keep using the car. The reason why a title loan is super convenient is that you can keep using and maintaining the car. You use the car as collateral, but the bank or financial institute does not get to keep it. However, the lender will take the car if you fail to pay more than one installment on time. Hence, you must be very careful and always make payments on time.
Which financial institute to choose for a car title loan?
There are a lot of financial institutions in Virginia that provide car title loans. However, you should do your deep research before opting for a particular institute. There are a lot of hidden charges that some lenders don’t tell you about beforehand. It can add even more burden on you; hence, research beforehand is essential.
Make sure the final institute you choose is a famous one with a few testimonials on its website. It is even better if you have someone who has had any experience with the institution before. Also, you must read all the policies and paperwork the company provides. Ask questions; if you don’t understand something, you should ask. It is essential to choose your lender wisely to avoid scams in the future.
Title loans are among the best loan types, which gives borrowers enough leverage. If you have a car in good condition, you don’t have to sell it to cover your financial shortfalls. You can keep the car and still get money to cover your expenses. However, it is essential to choose the lending agency carefully to avoid scams. Always read reviews and ask people for suggestions when choosing a financial institute.