Title Loans are generally simple loans where you pledge your vehicle to secure the loan, and the lender bases the amount you can borrow on the vehicle’s value.

There are two main types of title loans:

1. Single payment title loans and
2. Monthly Installment title loans.

Single payment loans are for very short terms (usually 30 days) with the full amount, plus interest and fees, due at the end of the loan term. Monthly installment loans have monthly payments and range from a few months to a couple of years.

Title Loans are Secured Loans

A title loan is a secured loan using the vehicle as collateral.  This means if you default on your loan you may lose your vehicle.  This is similar to a regular car loan; if you stop making payments on a car you financed it will likely be repossessed.

No Credit Check Title Loans

Title Loans are secured by the vehicle. As a result, most lenders do not require a credit check. This means title loans do not affect your credit score. It also means you can get approved for and funded for a title loan regardless of your credit history (good, bad, or non existent).

Single Payment Title Loans

Single payment title loans are similar in some ways to Payday loans. You borrow an amount from the lender and agree to repay the full amount, plus interest and fees, by the due date.

These are usually very short term loans, with the most common term 30 days. Single payment title loans are usually for smaller loan amounts given the fact that the full amount is due within 30 days.

Title Loan Rollovers

The full amount of a single payment title loan is due within 30 days, and many customers are unable to repay this amount in such a short period of time. Most lenders allow the borrower to “rollover” the loan for another 30 days. To do so, the borrower must pay the interest and fees due.

Rolling over the loan can cause the costs of the title loan to quickly and significantly add up. Also, the principal is still owed, so even though the borrow made payment(s) the full amount is still due. Learn why roll overs are not a great idea.

Monthly Installment Title Loans

Monthly term title loans are loans that are amortized over the loan period. This means the loan is broken into equal monthly payments with both principal and interest paid each month.

This makes the loan easier to repay and ensures that the principal balance is reduced each month. These loans can still be expensive, especially if the interest rate is very high.

What do I need to get a Title Loan?

In most states getting a title loan is fairly easy.  You will need to meet the lender’s requirements for a title loan.  Generally, these will include at least the following, in addition to a vehicle obviously:

• Lien free Title
• Valid Drivers License
• Proof of Insurance

Some lenders have additional requirements which can include:

• Proof of Address
• Proof of Income
• List of References 
• Vehicle Spare key

Not all lenders have these additional requirements, so it is important to check with your lender to make sure you have the right paperwork to obtain the loan. 

Why do Title Loans exist?

Car prices have risen considerably over the past few decades and for many people they have a significant amount of equity in their vehicle after they have repaid the original vehicle loan.

Additionally, the number of households with enough savings for an emergency has decreased during the same period that vehicle prices have risen. So, for many people, being able to access the equity in their vehicle for emergency expenses is a worthwhile benefit.

What do Title Loans really Cost?

Car Title Loan costs can vary significantly from state to state and lender to lender.  Many lenders prefer to keep their interest rates, fees, and actual costs difficult to figure out. 

Car title loan costs will start to increase if you make late payments and roll over a fixed term loan. You will want to find a lender with a reasonable rate and make sure to borrow only what you are sure you can repay.

A sure way to end up with a bigger problem is to take out a 30 day loan with no means of repaying it. Additionally, extending a monthly payment title loan too long can result in excessive costs.

Do Online Title Loans have more Requirements?

Online title loans do require more from the borrower to obtain the loan.  These additional requirements include those mentioned above in addition to employment information, additional references, and vehicle pictures. 

Again, requirements differ from lender to lender so it is important to check with your lender to find out their requirements. 

How much Cash will a Title Loan give me?

The amount you can borrow with a title loan depends on several factors. This first is the vehicle. Your vehicle must have enough equity in it to be able to support the loan. Not sure what your vehicle is worth?

You can look up the value using KBB. The next factor that will determine how much you can borrow is your ability to make the loan payments. You will need to have income to support the loan. And, finally, the state you live in may limit the amount you can borrow.

How do I get the best deal on a Title Loan?

To get the best deal on a title loan we recommend a few things and discuss this in detail for online title loans. First, find a lender that does not charge very high rates. They do exist, it just may take some research.

Next, get several quotes from lenders and go with the best one. When you get to the lender read the entire loan agreement and ask questions if you don’t understand something.

Some lenders choose to complicate their loan agreements and bury clauses that are not in favor of the borrower with hidden fees. If you are reading the loan agreement and something doesn’t seem right ask the question.

If the answer doesn’t make sense walk away and find another lender. Remember, you can lose your car if the loan goes bad. Do not go through with it unless you are 100% comfortable with the terms.

Conlcusion

A Title Loan is a secured loan that provides fast cash based on the value of your vehicle. Title Loans are usually short term loans, ranging from a few months to a couple years. There are two main types of car title loans, single payment loans and monthly installment loans. Title loans are generally more expensive than other forms of credit and should be used only when absolutely necessary.

The post What is a Car Title Loan? appeared first on Fast Title Lenders.

The main warehouse clubs are Costco, Sam’s Club, and B.J.’s and the first issue to consider is: Are any of these stores reasonably close to where you live or work.  If not, then chances are you won’t go there enough to make the savings worthwhile.  The biggest savings at most of these stores come from items that you use every day; like toilet paper, cleaning items, diapers, snacks, frozen foods, pet supplies, canned goods and other consumables.  Larger discretionary items like electronics can likely be found on the internet, often at lower prices.  Part of the psychology of a warehouse club is to provide enough bargains on products that you buy, regularly, so that you assume all of the warehouse products are bargains, too.  Don’t fall for this.  Know prices of competitors, and watch for sales at your local supermarkets, which are often lower and packaged in smaller quantities.

The second issue to consider is size.  Warehouse packages are notoriously large, so the issue is: Do I really need this much, or might it go bad before it can be consumed?  Since many of us have cabinets and pantries that are already full, another size issue is storing the mass quantities that you just bought.  Finally, it can be pretty dispiriting to go to the store and buy only ten items, then get a bill for over $200.00 when you check out.

Thirdly, there is the issue of convenience.  Again, if the warehouse store is not close by, you will have to invest more of your time to shop there. Store hours are also more limited than your corner grocery store and they can be very crowded, depending upon when you are able to go. So you have to decide if the savings are worth the time invested to achieve them.

Finally, don’t forget the gas!  For some people, the savings on gasoline, alone, will more than pay for their yearly membership fee.  At the present time, a popular warehouse store in Northern Virginia is offering premium gasoline for fifty cents cheaper than most of the local name brand stations.  If you fill up a 16 gallon tank once a month, you save $96.00 a year on gas alone!

In conclusion, if there is a warehouse store reasonably close to you, and you have the flexibility to visit the store when it’s the least crowded, it probably makes sense to join.  If you require large quantities of consumable items for your family or business, it probably makes sense to join.  If you don’t have the time (or patience) to invest in what can be a 2+ hour excursion, or the need for the larger sizes found at warehouse stores, stick with your local grocer and watch the ad circulars for the best deals.

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Understanding the Truth in Lending Statement

Usually, on the first page of your loan agreement, you will notice a table with four cells on the first line. This is the Truth in Lending Statement. Once you are familiar with how to quickly interpret one, comparing different loans becomes much easier.

Boxes in the TIL Statement

Every TIL Statement has four boxes on first line. The first two have a thick outline to stand out. These are important and the requirement is for a thick border to make them easy to find.

TIL Statement Boxes 1 and 2

Box one is the Annual percentage Rate (APR) of the loan.  This is a standardized rate that communicates to overall cost of the loan. You may notice most title loan are advertised using the monthly interest rate. For example, 8% per month or 12% per month. Even with a title loan, the TIL Statement requires the APR to be displayed in box one.

Box two is the Finance Charge. This is another standard box every type of loan including title loans. This is what the credit will cost you in dollars. Understanding how to quickly look at these two boxes on a TIL statement will make evaluating loans easy. We’ll look at a few examples below.

TIL Statement Boxes 3 and 4

The third Box is the Amount Financed.  In the case of a Title Loan this is the amount you are borrowing plus any fees you are being charge for the loan.  This is also standard for all loans and represents the amount you are borrowing from the lender. There should be no surprises here.

The fourth box is the Total of Payments. This is how much you will pay in total. This includes both the amount you borrowed plus all interest and fees. This is the total dollar amount you will have paid assuming you make every payment as scheduled. The nice thing about these statements is that every most lenders are required to provide you with one in the same or similar format; if they don’t, you are allowed to ask for one.

Monthly Rate versus APR for Title Loans

When looking at Title Loans, it is important to note the difference between APR and the Monthly Interest Rate.  Most Title Lenders use monthly interest rates; however the APR will be listed on the Truth in Lending Statement.  The APR is simply the Monthly Interest Rate times 12.  

A Monthly Interest Rate of 15% would equate to an APR of 180% (12 times 15).  An APR of 240% would equate to a monthly interest rate of 20% (240 divided by 12).  For every 1% increase in the monthly interest rate, the APR increases by 12%, which can add up quickly.

Because the Truth in Lending Statement requires the APR to be listed, in an obvious display, your ability to compare lenders is made much easier.  You do not need to understand any complex financial equations or terms.  

TIL Statement Examples

For example, let’s look at the four items from a Truth in Lending Statement for a $2000 loan with a 12 month term and an APR of 200%:

As you can see in this statement this loan would cost you $2,746.46 to borrow $2000.  Your total payback amount is $4,746.46.  In simple terms, this is a very expensive loan, you are paying back much more than you originally borrowed.  Now lets look at the same information for the same loan with an APR of 96% (8% per month):

As you can see in this statement this loan would cost you $1,184.68 to borrow $2000.  Your total payback amount is $3,184.68.  Instead of paying $2,746.46 in finance charges you are only paying $1,184.68; a difference of $1,561.78 or over $130 a month.  On a $2,000 loan this is a significant difference.  The finance charges on the 8% per month loan are significantly less than half of the finance charges on the 16.67% loan.

Summary

Use the information provided to you by the Truth in Lending Statement to make sure you understand exactly what the lender is charging you for the loan. And, as always, if you are not comfortable with the terms, don’t be afraid to walk away from the loan.

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How many times have you had an impatient  driver ride your tail and then speed by you, only to find him one or two cars in front of you at the next stoplight.  The reality is: the risk of speeding, and its consequences, is not worth the reward. (You save incredibly small amounts of time on most trips).

Consider a 10 mile commute to work, on a road with a 55 mile per hour speed limit.  Most officers will give you the benefit of the doubt for driving 60 (or 5 miles over) but, you are in a hurry and drive 70. If caught, you are going to get a ticket for 15 over and a fine of at least $100.00. More than likely, your insurance premium will rise by an equal amount – all to save less than 90 seconds! 

It will take you 10 minutes to drive 10 miles going 60.  It takes you 8.6 minutes if you drive 70.  At 20 over, for the same trip, you save a whopping 2 minutes; but now, you will be ticketed for reckless driving.  So, in addition to greater fines, you may require a lawyer just to keep your license.

Most importantly, it pays to be careful of your speed in congested areas, especially neighborhoods where there are a lot of kids.  These areas are often patrolled regularly, if the residents notice speeders and complain, accordingly.  It is very easy to find yourself well above the speed limit – but the same consequences apply, whether you are driving 45 in a 25 zone, or 75 in a 55 zone.

The best solution might be to regularly use your speed control.  Most cars are equipped with speed controls that adjust for hills and keep you from losing track of how fast you are going if you get distracted; or if you don’t want to be constantly looking at the speedometer.

Be careful out there and save time!  Don’t speed and you won’t be sitting on the side of the road for 20 minutes while the officer prepares your ticket.

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If you are in the market for a new or pre-owned vehicle and plan on trading in your current vehicle, it pays to get the most. The more you get for your trade-in, the lower the total cost of the new vehicle purchase.

Some new or used car buyers simply take whatever the first offer is for the trade-in and move on. This is a mistake and it is worth at least trying to increase the amount the dealer gives you for your trade-in.

Ways to increase the amount provided for a trade in.

Clean the Vehicle

The first thing you should do before any vehicle appraisal is clean the vehicle or have it cleaned. This might seem obvious but many people don’t and assume it doesn’t matter. A clean car is important.

Know the Vehicle Value

At a minimum you should be getting the trade-in value of the vehicle. Sometimes dealers will offer well below the real value of the vehicle of a trade in to increase their profits.  

Know what your vehicle is worth so you can have a good idea of what you want to get for trading it in. If you don’t know what your car is worth, then you don’t know when you’re getting a bad deal.

Negotiate the Purchase Price First

When you sit down with the salesman to talk details about the vehicle you are purchasing, negotiate the price of the vehicle you are purchasing first, let them know you have a trade-in but want to see if you can make a deal on the vehicle you are purchasing before spending any time talking about your trade in.  

You want to negotiate the price of the vehicle you are purchasing separate from the price of your trade in.  Dealers prefer to bundle the two transactions so they can raise or lower the price of one or the other without affecting the overall price.  Get them to commit to a price on the vehicle you are going to purchase and once that is final then negotiate your trade in vehicle price.

Compare the Offer to the Vehicle Value

Let the salesman make you an offer on your trade in and compare it to what you think the vehicle is worth based on your research.  If they made you a good offer you can always counter and try to get a slightly higher offer.

If they offer you significantly less, ask them to call their wholesalers and find out if they can get you a better price. You can also ask to speak to the appraiser and ask how they came up with the value of the vehicle.  

If there is a valid reason like salvage history or frame damage, then at least you know (if you didn’t already).  If there is no valid reason, let them know what you think your car is worth based on your research and ask them to appraise the vehicle again.  

Sometimes dealers start with low offers without appraising the vehicle hoping you will just take whatever they offer.

Be Prepared to Walk Away

Finally, the biggest lesson to learn when purchasing a vehicle, is be prepared to walk away if the deal is not in your favor. Getting the right price for your trade can have a big impact on your total purchase price; make sure you are comfortable with all of the terms of the deal.

The post How to get the most for your trade-in. appeared first on Fast Title Lenders.

Having a vehicle with a large amount of equity can also be a financial safety net for emergencies.  To understand what your vehicle is really worth, first you need to understand how vehicles are valued. 

How Vehicles are Valued

When a vehicle is valued, there is not one simple number assigned. There are generally four different categories for vehicle values, in order from highest to lowest:

1. Retail – What a dealer will sell the vehicle for.
2. Private Party – What the vehicle is worth in a private party sale.
3. Wholesale – What a wholesaler will pay for the vehicle.
4. Trade-In – What a dealer will pay for the vehicle.

The value of the car can vary significantly depending on the category.  Additionally mileage, condition, options, and history all factor in to the value of your vehicle.  Just like all products, a car is worth what someone will pay for it at that moment. 

A simple answer to this question is the vehicle is worth what a willing buyer will pay for it right now.  The category of buyer is what will affect how much they will pay for the vehicle. Let’s look at the four categories:

Trade-in Value:

The trade-in value of the vehicle is what a car buyer (dealer) will pay for the vehicle.  The simple answer to “what is my car worth” is what someone will pay for it today. 

If you need to sell it immediately there are companies that will purchase vehicles directly from the public. Autotrader also has a car buying service where they will provide you with a quote and a dealer interested in purchasing your vehicle. Carvana also buys vehicles directly from the public. There are plenty of others.

Do not be surprised if the amount these companies offer you for your vehicle is significantly less than the retail or private party value of the car. 

These companies need to make a profit to exist, and do so by purchasing vehicles for less than they sell them for.  They have expenses to cover, and if they end up selling your car at a wholesale auction they will offer you less than wholesale price.

Wholesale Value:

The wholesale value of the vehicle is what a wholesaler will pay for the vehicle.  A wholesaler purchases vehicles from dealers and sells them to dealers (often through wholesale auctions). 

They do not deal with public, and wholesale auction data is not readily available to the public.  The wholesale value is usually slightly higher than the trade-in value but can vary depending on make, model, mileage, and condition. 

A low mileage vehicle can be worth significantly more than the same vehicle with high mileage.  The same applies with condition.  A pristine vehicle is worth significantly more than the same vehicle that has cosmetic and mechanical defects. 

If you are trading your vehicle in to a dealer and buying a new vehicle; you can negotiate the price of the trade-in and get the dealer to pay you the wholesale value (or higher).  They want to make the sale; so making a profit on your trade-in in less important to most dealers. 

Private Party Value:

The private party value is what you can expect to get for the vehicle if you sell it yourself. If you prepare your car for sale by fixing any mechanical issues and reconditioning it, place a classified ad, and show the car to potential buyers you may be able to sell your car for more than the trade-in value.  

If you are lucky, you can sell the vehicle quickly for what you think it is worth, however, there are no guarantees.  It may take some time to sell, and you may end up having to lower the price.  

Kelly Blue Book provides estimates on private party sales for most vehicles; again condition and mileage will be a big factor.

Retail Value:

The retail value of the vehicle is what a dealer will try to sell the vehicle for and is the highest value of the four categories.  Unfortunately, the retail value of a vehicle is not what the vehicle is really worth.  We’ve all heard the saying about the car depreciating as soon as you drive it off of the lot. 

It can be frustrating to see a vehicle very similar to yours at a dealer for $15,000 and then see the trade-in value is only $11,000.  The dealer has expenses including rent, wages, utilities, and other costs. 

Additionally, the dealer will repair, recondition, advertise, show, and store the vehicle while they try to sell it.  This process can take months.  Like any other business selling a product, they need to sell cars for more than they purchased them to continue to exist.

The Real Value:

So what is the real value of a car?  The real value of your vehicle is somewhere between the trade-in value and the private party value; depending on if and how you plan to sell the vehicle. 

Finding a buyer in the private party category will net you the most for the vehicle, but it is not without risk.  To sell the vehicle immediately you can expect to get the trade-in value.  In some cases, there is a big difference between the two.

If you are just looking for the value of the car and not interested in selling it; take the difference between the private party value and the trade-in value.  This will give you a decent estimate of what the vehicle is actually worth.  If and when you decide to sell it, you can adjust as necessary.

Car Title Loan Value

A car title loan is a secured loan and the value of the vehicle usually determines the maximum loan amount. For purposes of this exercise we recommend using the trade-in value.

Next Steps for a Title Loan

Part of preparing for a title loan is knowing the value of your car. Now that you know the value of your car, if you are interested in a car title loan, some other preparation is recommended.

Car title loan costs, rates, and terms can vary widely depending on both the state you live in and the lender you choose. To get an estimate you can use the title loan calculator. Preparing properly can help save a significant amount of money and help ensure you find the best possible title loan.

A few things you will want to decide include whether or not to get an in-person or online title loan. For more information on both types, and other related topics, visit our site.

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