How to Get a Title Loan with the Best Interest Rate Possible

More than two million Americans apply for car title loans each year. This financing method appeals to those who need a small amount of money for a short time. Compared to traditional loans, it’s easier to qualify for and has more flexible terms.

Not sure how to get a title loan? As you would expect, each lender has different fees and requirements. Therefore, it pays off to shop around and assess your options.

Check the application and repayment fees (if any), how quickly the payout is, and how you can repay the loan. Reach out to several lenders to request a quote and read the fine print to make an informed decision.

This type of financing can be a fast way to get money in case of emergencies. However, you shouldn’t go for the first offer you find.

Interested to learn more? Here’s what you should know about title loans and how to find the best rates!

How Do Title Loans Work?

Car title loans have emerged as a quick, easy way to get cash. Whether you need money for medical emergencies or home repairs, you may apply for this kind of loan. The funds can be used for any purpose.

Even if you have bad credit or no credit at all, you may still qualify for a car title loan. With this financing option, you will use your vehicle as collateral. Its value determines the maximum amount you can borrow.

Most lenders offer about half of the vehicle’s resale value. Depending on how much your car is worth, you can get anywhere between $100 and $10,000 or more. The lender will hold the title until you pay the loan in full.

A major advantage of title loans is that you can apply online. This allows you to request multiple quotes and compare them on a like-for-like basis before making a choice.

How to Get a Title Loan That Fits Your Budget

According to a 2016 report, one in five customers who take out title loans end up losing their cars because they fail to pay off the debt.

The truth is, many borrowers are not fully aware of the fees associated with this financing method when they apply for a loan.

For example, some lenders charge application fees, while others don’t. There may also be late payment fees, collection fees, lien filing fees, and more.

Considering these aspects, it makes sense to shop around and get as much information as possible before submitting an application. Check the lender’s reputation, read customer reviews, and compare quotes from at least three providers. Also, try not to borrow more money than you need.

Compares Rates Online

Start with a quick online search. Make a list of lenders and request multiple quotes. Check the terms and conditions of the loan as well as the legal terms to avoid hidden fees.

Lenders are legally required to list their interest rates online and in physical stores. However, other fees may not be advertised publicly. It’s your responsibility to check whether or not there are any additional charges.

Remember to check the repayment options too. Ideally, select a lender that allows you to pay online, over the phone, and in-store. A company that doesn’t process online payments may charge late fees if you cannot make it to its stores to pay on time.

Check the Lender’s Reputation

Car title lending companies are popping up all over the U.S., making it difficult to choose one you can trust. Again, a quick online search is your best bet.

Look for customer reviews and testimonials other than those listed on the company’s website and social media pages. Check online business directories, such as the Better Business Bureau (BBB), Yelp, and Foursquare. 

Make an Informed Decision

Now that you know how to get a title loan with minimum rates, go ahead and check your options. Consider making automatic payments to avoid extra fees. Contact the lender by phone or email to discuss your needs and see how reliable their customer service is.

Looking for other ways to get money or cut your expenses? Browse the rest of our blog for other tips! We’ll show you how to make smart financial decisions and keep more money in your pocket.