People often use title loan when they are strapped for cash, as these are an useful resource. Of course they contains risks, if you miss a payment, your car will be taken. However, if you use it responsibly, it can help you recover from a financial pinch quickly and effectively.
The way that a pink slip loan works, is that you sign the lease of your ride over for a cash loan. You have a set amount of time to pay the loan, plus interest, back (usually 30 days) and you keep your ride. If your loan isn’t repaid on time, they come and repossess your car.
What You Need For A Title Loan
In order to get a car title loan you’re going to need a car (duh) that is paid in full and a copy of the car’s title. You’re going to bring this with you to the auto title loan lender and they will appraise your automobile. After figuring out the value of your car, you will be offered an amount that you can borrow and the terms of paying it back. The terms are usually thirty days with an exceedingly high interest rate. Automobile title lender play their game outside of the bounds that banks and credit card companies do, so they can charge this very high interest rate and can get away with it.
Often, you’re going to also have to give them a copy of the key to your car in case you fail to make your payments and default on the loan. Cash auto title loans are not very kind, and will come and repossess your ride from you. Some states don’t require the lender to pay you the difference from the sale of your ride and the money you owe them, it could end up a double whammy.
One title loan company in the Southwest actually mandates that each ride is installed with a GPS tracker so that they can be found for repossession.
When You Shouldn’t Get A Title Loan
The obvious time that you shouldn’t get a ride title loan is if there isn’t a way that you’ll be able to pay the loan back. You’re probably thinking, “Yeah dude, I know that already,” but tons of auto title loan lenders earn as much money (or more) by selling your car after it’s been repossessed as they do from people paying loans back on time. This tells me that people aren’t appraising the risk as much as they need to before agreeing to the loan’s terms.
If you’re serious about getting a pink slip loan, spend some time researching their websites to see which one is going to give you the best deal. They aren’t really governed by any laws that state how much interest they can charge you, so the terms are going to be very different from one company to the next. This time spent researching can save you hundreds or thousands of dollars, or even your ride, if you are willing to spend the time doing it.