Tips for Getting a Title Loan in Virginia

Getting a Title Loan can be a difficult decision during a very difficult time.  If you are in the market for a Title Loan, here are some tips to avoid getting stuck with a loan that ends up causing more problems than its worth:

  1. Borrow only what you need.  A Title Loan in general is costly to pay back, and one way lenders make money is convincing you to borrow more than you need.  A bigger loan means bigger monthly payments and more interest; this is good for the lender but may not be good for you.
  2. Financial stress can be very difficult to deal with, and Title Loans are sometimes a last resort, but do not feel like you have to sign anything that is put in front of you. You don’t, remember you are the customer in the transaction. There are options, plenty of lenders in this area, and you have choices. Take your time and understand what you are committing to.
  3. Make sure you understand any fees the lender charges.  Virginia does not allow Title Lenders to charge any loan origination fees.  They do, however, allow the lender to charge the actual cost of recording a lien.  If you have a Virginia Title this fee is $10.00.  If there are other fees listed in your agreement, ask them to remove them or go to another lender.
  4. Ask the lender what type of payments they accept.  Make sure it is possible for you to make your payments on time.  If you have to visit the lender to make your payment, consider this and make sure you are able to every month before your due date.  If it will be difficult for you to visit the lender every month, make sure they have payment methods that you have access to that allow you to pay without visiting them.
  5. Make sure you have the time to read the Loan Agreement carefully and make you understand it before signing it. Keep asking questions until you do.  Make sure you understand what will trigger a Default and what actions the lender will allow you to take to cure a Default (if any).
  6. Title Lenders in Virginia are limited, by Virginia law, in what they can lend to 50% of the vehicle’s fair market value.  Know what your vehicle is worth, and be wary of a lender offering you more than 50% of its fair market value.  The more you borrow, the higher the monthly payment and the more Interest you end up paying.  Again, borrow only what you need.
  7. Do your research online before visiting a lender.  Read their reviews, see if they disclose their Interest rates and fees on their website, and make an educated decision.

Finally, use common sense.  If something doesn’t seem right, it probably isn’t.  Don’t let any lender talk you into signing anything, remember you are the customer.  We understand financial stress can be very difficult. Don’t make it worse by locking yourself into a loan that will end up causing more stress.  Get a loan with payments you can afford to make, and without unnecessary fees.