A title loan is a quick way to get cash when you need it. It’s like a payday loan and typically requires the borrower to pay it back within thirty days. Depending on your circumstances and the agreement between you and the lender, the loan period can be for up to three years. Some issues can arise from these types of loans, and they should be your last resort.
Basics of Title Loans
To start the process of getting auto title loans, San Diego car owners simply need to apply. The best part of these types of loans is that there’s no credit check. The one thing that’s usually required is that you own a car with no outstanding loan on it. After you’re approved, the lender will hold the title to your car. If you cannot pay off the loan, your car can be repossessed. Once you pay the loan back, the lender will give you the title back.
Amount of Time to Repay
The time you have to pay back the loan is normally between fifteen and thirty days. Other title loans can have payback periods of anywhere between one and three years, depending on how the deal is worked out. The purpose of a title loan is to get the money you need right away, which can make it difficult to pay off a title loan as quickly as the lender would like.
Interest and Fees
The issue with title loans is that the fees and interest can often add up to more than what you initially borrowed. If you need money right away, a title loan is a quick way to do that, though. The average annual percentage rate for these types of loans is 300 percent. If your loan is for a year, that’s 25 percent interest per month. There could be other fees as well. If you have a month-long loan and cannot pay it back, your lender could roll it over into another thirty-day loan. A $1,000 loan would have a $250 interest rate. If the loan is rolled over, another $250 would be added to the interest. The average fee borrowers pay for $1,000 title loans is about $1,200.
Repossession in Case of Nonpayment
The biggest risk is having your car repossessed for failure to pay back the title loan. There are two tactics some lenders will use to make it easier to repossess your car if you default on the loan. First, they can make a copy of your keys. Second, they can install a GPS tracker in your car. About one of every five people who roll over their loans has his or her car repossessed. A lender may take your car if you’re not making the payments and even if you’re making partial payments.
When I need a convenient, quick way to get cash, I look for title loan places near me. San Diego folks who want high-quality service don’t need to look any further than Payless Car Title Loan. Our loan process is easy, and you’ll find the highest levels of professionalism when you work with our team. Call us today at 619-600-0061 to find out how we can help.