Auto Title Loans - What to Look For and What to Watch Out For
By John Campbell
If you own your own automobile, you qualify
for an Auto Title Loan. If you need fast cash
during a financial crunch and can't get a
traditional loan, open or extend a line of
credit or borrow money from friends or family,
Title Loans may be your only alternative.
Most Title Loans have very high interest
rates and other expensive fees, but you can
get one with less risk and fewer fees if you
know what to look for.
The key to getting the best deal
with the least risk is to shop around.
Don't hit the panic button and take the
first Title Loan you see. Even if you
need cash for an emergency, you should
still have enough time to find out some
simple facts. Call some local lenders
and Google the top 10-20 Title Loan companies
online. Compare the various interest rates
and fees between companies and choose
the lender that has the best rates.
As a borrower, you should only take out
the funds you need and no more. You should
never take out a Title Loan if you aren't
certain you can pay off the loan in full
at the end of the loan period. If you
have to rollover the loan, you'll pay
a lot more in interest and fees. Would
you like to spend $750 on a $250 loan?
Some consumers have.
If your loan will be paid back via a
direct deposit from your bank account,
make sure to find out on what date the
funds will be withdrawn from your account.
If you don't know when your account will
be charged, you could end up with a missed
payment or a costly overdraft fee from
your bank.
Even if you don't expect to miss a payment
or rollover your loan, you need to know
what additional fees each lender charges
for every rollover. Some lenders also
put a cap on the number of rollovers they
will allow.
If you don't have enough money to pay
the loan and all the additional fees during
the final rollover period, you may end
up defaulting on your loan. If you default
on your Title Loan, your car could also
be repossessed. Losing your automobile
is the biggest risk for anyone who takes
out these loans.
You need to find out exactly what the
lenders' policies are in case you miss
a payment or default on the loan. It's
wise to always plan ahead according to
Murphy's Law -"Anything that can
go wrong will go wrong."
You should be asking each lender the
following:
If I default on a loan, is there anything
I can do to avoid having my car repossessed?
How quickly after defaulting on my loan
will you repossess my car?
If you repossess my car will I have any
time to repay the loan before you resell
the car?
Will I be charged storage fees for my
car if it is repossessed?
If you sell my car, will the funds go
towards paying off my loan or will I still
be liable for paying back the loan?
If you sell my car, am I entitled to any
funds from the sale of the vehicle?
As a consumer, you can demand full disclosure
of all charges and the annual percentage
rate (APR). This includes all policies
regarding the possible repossession of
your automobile. Make sure you understand
all the loan terms and get them in writing
before you sign the loan.
The more you shop around, the easier
it will be to make an informed decision
as to what Title Loan is right for you.
© cashbuzz.com
John Campbell is the writer and editor
of CashBuzz, A financial portal for the
rest of us. Check out cashbuzz.com
for the latest articles on money management
and tips and tricks that can help improve
your finances. This article may be reprinted
on your Web site if the copyright, author
information and active link are included.
Article Source: http://EzineArticles.com/?expert=John_Campbell
