Basics of Auto Title Loans

The car title loan is a loan offered for a short period, and is a small amount. Your vehicle's title have to give the lender to get the title loan. The lender can charge some fee to provide the loan on your vehicle title. The loan usually have to repay within a month. These loans can be expensive. If you are failed to pay the money to the lender, your vehicle will be taken by them. There are many sources to borrow money. You may get from your family members, friends, credit unions, banks, or with your credit card.

• Steps in the car title loan: You can get car title loan directly from store or through online. Generally, getting a car title loan involves the following steps.
• First, you need to show your car and its title, application for the loan and your photo id to the lender. Some lenders may ask you to buy a roadside service plan or extra copy of your car keys.
• If you meet the requirements of the lender to approve the loan, he will give you money. The lender keeps the title to your car with him.
• Usually the lender gives you a period of 30 days to repay the loan. Once the time is completed, you need to repay the lender for the amount you borrowed along with some monthly fees.

• Cost of the loan: The lenders charge you a monthly fee. This fee varies from lender to lender. It can be negotiable from many lenders. Sometimes the charges are up to 25% of the loan you borrow. For instance, you want to borrow 1000 dollars for 30 days, and the monthly fee is 25%. The total amount you owe to the lender after 30 days is ($1000+($1000*25%)) $1,250. Most loans have annual percentage rates (APR) which tells the costs of loan for year. The APR is based on the period you borrow the money, the fees you pay, interest rate and the amount of money you borrow. By doing a simple you can compare different sources and select the best suitable one for you.

• Advantages and disadvantages: The following are the advantages and disadvantages with the auto title loans.
• Advantages: Auto title loan enables the borrower to get the money quickly. These loans are processed within one or two days. The lender just looks at the car to estimate the worth of the vehicle that you need to borrow. There are no background and credit checks are involved, so anyone those are with a vehicle can get this loan. If the borrower has bad credit record, auto title loans are best, because they will give only with an assumption of the borrower can pay back along with interest or fees. Another advantage is even after the loan granted, the vehicle is with the borrower only.
• Disadvantages: Auto title loans are for short-term only. The interest on the loans are low but every time you extend the loan period, interest on loan increases. If the borrower defaults the loan payment, there is risk of losing the vehicle.

Before you get the vehicle title loan, consider other choices and sources. Before you are taking loan, ask the lender to tell the costs in dollars, and APR. Borrow an amount, that you can pay within the due date of the loan.

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