Considering getting a car title loan online? Title loans can be expensive, and the increasing number of online title loan companies can make finding the best deal and choosing your lender a challenge. It can be hard to tell a lender that will provide a loan with favorable terms from a lender that has been know to charge very high rates.
There are several tips you can use to help make sure you get a title loan that is in your best interest. Remember, title loans are not the answer to every financial shortfall, they should be used in specific situations where they will solve a problem.
Car title loans are a form of secured loan that allow consumers to borrow money using the equity in their vehicle as collateral. These loans have changed over the years and now online car title loans are available in many states.
If you are considering a car title loan online, make sure you understand both the costs and benefits associated with them. This will help ensure you find the best solution for your situation. To help simplify understanding how specifically to get the best online title loan, we’ve chosen three key factors to examine.
Three Key Factors for Online Title Loans
To make it easier to understand what to focus on when getting an online title loan, we suggest keeping in mind three kay factors. When shopping for a car title loan online, these key factors include:
- The total cost of the loan – this is even more important as more lenders increase the loan length. Title loans are short term solutions; trying to make one a long term loan can result in excessive costs.
- The car title loan lender – find a decent and reputable lender. This is often easier said than done, but can be completed with a little bit of time and effort.
- The loan terms and conditions – these dictate how your online title loan is structured. Always read the online title loan agreement in full before signing.
These factors should be figured out before you apply for the loan; during online title loan preparation which is the first part of what we will cover.
Online Title Loan Preparation
The first step before getting any title loan, including an online title loan, is preparation. Often title loans are rushed into to pay for emergency expenses and preparation is skipped.
This, in many cases, leads to an unfavorable loan. Even the best online title loans can be expensive, so preparation is important.
For online title loans this is even more important as delays in funding often relate to an incomplete application or an application with inaccurate or inconsistent information.
In these cases the lender will verify the information, usually through a quick phone call. For completely online title loans with no phone calls this verification can be through email or text, but may add time to the funding timeframe.
On to the tips based on key factors:
Online Title Loan Tip 1 – Find out the Total Loan Cost
Assuming you have already determined you make a good candidate for a title loan, the first thing you will want to do is figure out the total loan cost.
Title loans online are either single payment loans or monthly installment loans. For single payment loans finding the total loan cost is fairly easy.
You can take the monthly interest rate and multiply by the principal amount (the loan amount. Then add any fees the lender charges. The hard part night be getting an accurate interest rate from the lender.
Monthly installment loans, on the other hand, are amortized. This means the cost of interest is spread out over the loan term. The title loan calculator shows the cost details for each monthly payment. This allows you to enter any loan amount and view how each month’s payment breaks down into principal and interest.
Sometimes lenders try to focus you on the monthly payment, rather than the total loan cost. With title loans, this can be a big mistake and end up costing a significant amount of money. Take a look out how much a title loan can cost when amortized over a longer time frame. The results may be surprising.
Online Title Loan Tip 2 – Find the Best Title Loan Company
The next tip for getting an online title loan is to find a lender that is best for your situation. This is not the title loan company closest to you or the first search result for title loans.
Finding the best title loan company means finding the company that provides the best solution for your situation. You should take into account cost, location, payment methods, and anything else that is important to you.
Do some research on the lender an make sure they have a good reputation. It is also advisable to compare their interest rate with other lenders to make sure it is reasonable for the loan amount.
This is just a high level overview, we cover the full title loan process in our guide on how to get a title loan.
Online Title Loan Tip 3 – Terms and Conditions
The final tip is to make sure you are comfortable with the terms and conditions of the loan. Find the lender that offers the best terms and conditions for your situations.
This includes everything from late fees, payment terms, loan length, default definitions, and everything stipulated in the title loan agreement.
This requires taking your time and reading the loan agreement in full. It is essential to read the loan agreement in full before signing it. If you get to a clause you don’t understand, ask the lender to explain it to you.
This can sometimes be more difficult with online only title loans as you will not be with the lender when reading the agreement. Regardless, give them a call with any questions.
Conclusion
Car title loans can be a great source of short term funding using the equity in your vehicle; however in some cases can be very expensive.
As such, in some cases instead of a solution to a short term financial problem they can be the start of longer term financial problems which is the last thing anyone wants.
This is especially true if you get stuck in a very high interest loan that is very difficult to repay. If you are stuck in one of these consider a title loan refinance to reduce costs.
Make sure to complete the necessary preparation to help make sure a title loan is the solution to your short term financial needs and not the opposite.
In summary, prepare for getting any online title loan. Also, consider the following key factors:
- The total cost of the loan
- The car title loan company
- The loan terms and conditions