How To Shop for an Online Title Loan Lender

During these hard times, it’s been a necessity to save enough money to support our daily needs. Unfortunately, most of us just don’t have enough saved up to help us through tough times. If you lost your job, need medical assistance, or there’s emergency travel — expected, or unexpected — there are a variety of reasons you might be short on cash. That’s when a loan becomes an attractive option.

One of the fastest types of loan services is title loans. A title loan is a type of secured loan which allows you to borrow money in exchange for your car title as collateral. This is one of the many loan options you could apply for to support emergency needs or to fund your short-term expenses.

Now, it doesn’t sound too attractive, right? Of course, it’s your car we’re talking about here. If you’d be responsible for the loan agreement, then there won’t be a problem. You’ll keep your car and get the financial help you needed.

According to The Pew Charitable Trusts, the average title loan you could get starts at $1,000. However, like most of the loans out there, it depends on what your collateral’s worth (which, in this case, would be your car), your ability to pay, and some underlying factors on the loan contract. Title loans are available even if you have a spotty credit history, but the interest rates are going to be higher with a lower credit score.

So, how easy it is to apply for an online title loan? Well, it’s pretty simple actually. Search for a title loan provider in your locality and in most cases you’ll be able to do the submission fully online.

Below Is an Outline of the Online Title Loan Process:

  • Search for your car title: this is where the lender will evaluate your car’s value. The loan amount depends on your car’s worth. That’s why title loans do not reject your loan request even if you have a low credit score in the past. If your car’s value is more than the loan you’re looking to receive, you’re probably going to get the loan
  • Submitting necessary documents: car title loans are generally easy to apply for. You just have to present the required documents such as your car title, your driver’s license, or any IDs they will allow, proof of residence, proof of income, documents supporting that your car is officially under your name, etc. These requirements may vary from one lender to another, but at least some combination of them will be necessary for approval at any lender
  • Let the lender review your application: usually, an application for title loans is quick. The lender will go through your documents and reach out to you if there are any concerns
  • Acknowledge the contract: the contract contains the loan agreement and other important information for you to acknowledge. This agreement is very important since everything about your loan is explained in detail
  • And then your money hits!

Quite simple, right? However, you shouldn’t just sign up anywhere without considering some guidelines on which lender would be suitable for you.

Choosing a title loan requires you to be cautious because there are some less than above-board providers out there.

Consider These Factors Very Carefully When Picking an Online Title Loan Provider:

Reputation and credibility

Only take out a loan with an established company that has been in the business for some years now. You might get marginally better rates with some of the up-stars, but there’s also more risk in getting scammed by doing so.

Take your time and research the providers you’re interested in. Read testimonials and make sure that the services they offer are in-line with the regulatory policies of your area.

Check the fees and other possible charges

Well, hidden fees should already raise a red flag. You should consider if the lender’s agreement is reasonable and upfront. When you apply, you should feel like you have a very good grasp of the costs, risks, and what you’re getting. Do not apply until you feel confident in knowing what you’re getting into.

Consider your eligibility

Not all title loan services are going to be the right fit for you. Sometimes, your documents aren’t quite enough or the standards for approval are too high. Keep in mind to sign-up only for loans and services you know you’re eligible for.

This isn’t only about how good you are in terms of paying, but your trustworthiness on following the contract timeline and your ability to provide the necessary documentation. 

Interest Rates

Like you would usually do when window shopping, take time when comparing the interest rates from different lenders and choose the deal that best matches your ability to pay.

A majority of title loans are to be paid within a month (these are short term loans), but some lenders provide an extension for renewal.

Usually, the penalty for this would result in a higher interest rate moving forward. That’s why it’s very crucial to learn about the interest rates to avoid future debt. 

Though, don’t count on being given an extension because there’s no hard and fast rule that they have to give you the one — they could simply repossess your car if you’re late.

If have bad credit and you’re looking for a loan that is not short-term, an installment loan may be a better alternative to a title loan. You can learn more about installment loans by reading this lender’s FAQs.

Read the terms and disclosures in detail

You still need to stay vigilant once you’ve narrowed down your list of loan providers to the best 2 or 3 options. You must read through the agreement and make sure that you fully understand the terms.

Ask for assistance if you have any concerns and do not ever sign a contract if something isn’t clear. It is very important to evaluate your lender’s credibility as much as they evaluate yours. 

Making payments

Of course, the payment process must be convenient for you. The payment instructions are usually stated on the agreement but in some cases, you could also try to negotiate alternative payment options if their current ones don’t work for you.

They might not be able to offer you an alternative, but you can at least ask. Just make sure that you do so before signing the contract.

Online title loans might be an easy source of money but it does come with a risk if you’re not able to abide by the payment terms. You must be well-informed on what you are signing to avoid any further complications such as the lender repossessing your car if you failed to meet the agreement. In any kind of loan, you must carefully balance its benefits and risks, making sure that the pros will outweigh the cons.

In that way, you would also know how much risk you are willing to take in exchange for its services. Only take a title loan (or other secured loans) if you’re confident you will have the means to pay it back within 30-45 days. Otherwise, you could in yourself further in debt due to interest payments and lose possession of your car.

Final Thoughts

Online title loans are convenient during emergencies, especially if you are eligible and capable of paying it back. It’s very easy, and more accessible than other types of loans, so long as you have a car as collateral. But always keep in mind that applying for a loan requires you to make wise decisions about how it might affect you in the long run. If you feel that an online vehicle title loan doesn’t sit well with you, look for alternatives — only commit your name on the dotted line once you’re fully satisfied with the terms of the agreement.