Any person who is having financial problems should consider getting an auto title loan. Auto title loans provide consumers with an alternative method for getting extra funds quickly. Keep reading to find out four things you should know before getting an auto title loan.
1. You Must Own Your Car
Consumers who own their own vehicles can apply for auto title loans. Borrowers should have clear titles for their cars. When they’re thinking of working with lending companies such as TitleMax, San Diego residents should be aware that these companies use a borrower’s vehicle as collateral, so it must be in the possession of the owner. Never try to get an auto title loan with a newly purchased vehicle or a car you’re starting to make payments for. Auto title lenders won’t risk their money for a car that can be legally claimed by someone else.
2. You Shouldn’t Borrow More Than You Need
An auto title loan is like any other type of loan. Borrowers should never ask for more money than they need. If you do take more, you run the risk of not being able to pay off the loan. Most auto title loan companies will give you some time to pay off your loan. However, if you can’t pay it off after an extension, your vehicle will become theirs. Just make sure you’re borrowing what you need or less than what you need.
3. You Should Only Borrow for the Short Term
Auto title loans are like payday loans. Auto title lenders usually charge higher interest rates and other fees to keep you coming back. This is how they make money. However, this process can get you caught up in a never-ending cycle of borrowing. Eventually, you run the risk of not being able to pay off the loan and losing your car.
4. You Can Mess Up Your Credit Score
Auto title loans don’t require good credit. Lenders don’t care if your credit is good or not. However, if you end up defaulting on your loan, they’ll take your car, and your credit will be ruined. Auto title lenders won’t lend you more than 50 percent of your car’s actual value, so you’ll also be losing money on your car if they repossess it. Ultimately, you should make sure you’re able to pay off an auto title loan before you ruin your credit, lose your car, and get stuck in debt.
If you need a quick, easy way to secure cash and you own a vehicle, getting a car title loan may be the right option for you. For fast, convenient car title loans, San Diego residents rely on the high-quality service from the team at Payless Car Title Loan. To find out how we can help you use your vehicle to secure a short-term loan, give one of our friendly representatives a call today at (619) 600-0061.