Owning and operating a car in today’s day and age is very important. It is how we get around to important things in our life. If you cannot get financing for a car, you might be in trouble given your situation. The good news is that there are title loans out there. Title loans are basically a financing option in which you give up the title of your car as collateral until you pay back the loan. Compared to other financing options, title loans can get quite expensive if you don’t do your due diligence. In the article, I’m going to be breaking down the steps to finding a good title loan provider, the caveats to know about when taking on a title loan, as well as other methods for purchasing a car.
If you are seeking a title loan, find about 3 places in your area that do them and narrow it down from there. Make sure that you go with the most trustable and qualified lender. A lot of title loans online out there has a tremendously high APR, higher than any other financing option out there. What this means is that interest can make them really expensive. As far a the application process is concerned, some companies have you apply for a title loan online while others have you apply in person. When you are going to apply, the title loan company will want you to bring a few things: your car title, valid proof of insurance, a photo I.D., and maybe even an extra set of car keys. Remember, it is very important to read over all of the terms of the title loan contract. Signing a contract for something you didn’t know you couldn’t pay for is a big red flag. If you don’t understand parts of the agreement, make sure you ask questions. In the end, this will help save money for both you and them in the long run.
There are two big caveats when it comes to taking out a car title loan: the price tag of the loan and possible repossession. Like I said earlier, car title loans have one of the highest APRs out there. In fact, most of them are right around 300% APR. This is insane from a financing perspective! This means that you are going to be paying 25% interest each month towards the loan before any additional add-ons or service fees are charged. In other words, you would pay $1,250 on a $1,000 loan in one month. This is why title loans can get pretty expensive if you don’t know what you are doing. Because you might not know what you are doing, it could lead to repossession if you are unable to make the hefty payments. Repossession is every car owners worst nightmare. Not only do you lose your reliable source of transportation but you also lose out on the price that you could have sold that car for. In other words, everything that you paid towards that car title loan become a sunk cost that cannot be retrieved.
There are two other methods of car buying that I am going to be going over which is financing through a bank or credit union and buying a car with cash. In general, financing through your local bank or credit union would be a way smarter option. The APR is going to be tremendously lower and you are going through a more trustable source. Being a bank or a credit union, you have more than likely done business with them before. The next method I would recommend is buying a car in full with cash. By doing this, there are no chances of repossession and the interest doesn’t accrue like a normal loan. You have full ownership of the car. My last case scenario would be to take out a title loan for a car, especially Missouri title loans. Missouri title loans are some of the best in the south. If you live in St. Louis, Kansas City, or anywhere around there, try looking into Missouri Title Loans. Missouri title loans are great at doing business and they respect their customers. In the end, Missouri title loans are the right place for you!