You are in dire need of money, yet you cannot acquire regular loans because of your poor credit score. Quite perplexed and troubled, suddenly out of the blue, you come across an advertisement that sounds like: “Get Money for a Car Title Loan Pronto – Without any Credit Checks!” Car title loans seem like a ray of sunshine in a gloomy weather, but what exactly are they?
What are car title loans?
This is a loan in which you get a small amount of money only for a short interval of time. In order to get a car title loan, you have to give the lender your automobile’s title, such as your motorcycle, truck or your car. There is just one condition though; the borrower has to be the only sole owner of the car. Along with this, you will also have to pay a certain amount of fees to the lender in order to borrow the loan. Simply put, car title loan, also called title pawn, is a short-term loan in which the vehicle of the borrower is used to remunerate the collateral. In this regard, car title loans can be tricky and expensive. You might end up losing your car. Typically, a car title loan is only given for 30 days. If you are unable to pay back the loan within the specified time frame, you can lose the rights to your car and the lender has the authority to sell your car to regain the amount given in loan.
Assessing Car Title Loans
The lender company will evaluate the cost of your car at the wholesale rate and provide you with a loan depending upon the worth of your car. There is a lofty interest rate upon the loan. Although, the lender companies state the rate of interest at the time the loan is granted, the borrowers mostly fail to recognize that most of the time the loan rate is annualized. What does this mean? Here is some basic math to help you understand:
- You borrow $1500 for a month.
- The monthly fee on the loan is 25%.
- Therefore, 25% of $1500 (equal to $375) is the monthly fee.
- At the end of the month, you are liable to pay $1875
But this is not where it ends, as most of the loans also have an annual percentage rate (APR) which shows how much it will cost you to borrow money for a year and car title loans have accelerating APRs. APRs depends on:
- The money borrowed
- Monthly interest rate
- The amount you pay on fees
- The total duration for which you have borrowed the loan
So what may seem like just 25% is really more than 200%! Therefore, it is essential that whenever you approach a lending company for car title loans, you inquire about the total cost of the loan on your vehicle in dollars and the APR as well. The car title loan is a feasible option to determine your short term needs, provided that you have the ability to return.
Acquire car title loan from Advantage Finance in Houston, Texas and nearby counties. At Advantage Finance, flexible and customized solutions for your needs will be determined exclusively. Call today at (281) 410-5337 for the best rates and you will definitely visualize the clear “advantage” you receive on the car title loan you acquire.