Factors to Consider When Securing an Auto Title Loan

There are a few factors to take in to account as you go about shopping around for the best auto title loan. You want to consider the amount of money that you’ll actually need since that will determine the loan’s principal as well as the interest rates that are likely to be charged. What else should you scrutinize in your search for the easiest auto loan to pay back on time?

Principal Loan Amount, Interest, and Fees

That’s just it – the time frame over which the auto title loan is to be repaid is critically important. You want to ensure that you will actually have the funds coming in to make monthly payments towards your auto title loan, and you also want to make sure that you have enough money left over for interest on the loan and basic necessities, such as transportation and rent. Once these preliminaries are mused over, you’ll invariably start looking at actual creditors to take a loan out with.

Make sure that the company you’re considering doesn’t charge any exorbitant fees at the outset and that your interest payments are competitive with other auto title loan companies in your area.

Look for Legal, Licensed, and Experienced Creditors

Unfortunately, the loan industry has always attracted its fair share of loan sharks and other unscrupulous actors operating in bad faith. The auto title loan sector is remarkably well-regulated compared to other loan sectors insofar as auto title loan companies are stringently regulated on both the federal and state levels.

The first step that you should take to ensure that you’re dealing with an honest loan creditor is to check that the auto title loan company is actually empowered and legally chartered-licensed to extend loans to consumers in your state. The wonderful thing about auto title loans is that the state authorities limit the amount of interest that can be paid on these kinds of loans such that you should pay far less than you would with a harder-to-repay payday loan.

Scrutinize the Non-regulated Repayment Period

You should be aware of the fact that your state, no matter which one you secure your auto title loan within, will not regulate one aspect of your loan’s repayment terms – the time frame over which the auto title loan has to be repaid within to avoid default.

The takeaway? You need to really put the magnifying glass to the amount of allowable time for making your loan repayments since some less-than-perfectly-ethical creditors will gouge consumers by setting up unrealistic repayment periods so that they can seize your vehicle!

Don’t let that happen to you: Scrutinize the loan repayment period beforehand so that you wind up with more emergency cash from your auto title loan without losing your vehicle to an unscrupulous auto title loan company. Remember, the only aspect of the auto title loan that is not covered by state regulators is the amount of time that you can repay the loan.

Review Loan Company’s Finances

The finances of the loan company itself, ironically, will tell you a lot about the reputation and reliability of the company and inform your ability to make smooth payments in the future (more on that below).

A auto title loan company with a shoddy rating by the Better Business Bureau is probably bad news in that a company with unreliable bookkeeping or unethical practices can’t be relied upon? A poor rating from the Better Business Bureau also indicates that the auto title loan company isn’t making wise loans or simply makes loans so that it can repossess the vehicles of defaulting clients.

A Rigorous Approval Process

Some loan companies will require that you jump through proverbial hoops to secure a title loan online while others will simply require that you provide income information indicating that you have an ability to repay the loan on time in the future. Depending on your situation, being between one job and another or the kind of vehicle insurance you have could affect the approval process.