What To Expect From Your Title Loan
I read a particularly interesting email from a reader what had a terrible experience with a title loan last year. She didn’t fully explain what led up to her car almost being repossessed, but if my experience holds true, she probably didn’t do her research before choosing a title loan lender. Many people put more research in to renting a DVD than they do before signing on the dotted line. Remember, a title loan is like any other loan and the rates, quality, and reliability will vary from lender to lender. There are some basic and simple questions you must always ask when you are searching for a title loan.
1) What are the terms and fees? There are some title loan lenders that have all sorts of hidden fees in their title loans. One of the more common ones is an “early repayment fee” which is basically a penalty for paying your title loan off before the one month term is over. A quality title loan lender will not charge you for paying your title loan off early.
2) What is the interest rate? A title loan is a short-term loan, therefore the lender only has a short period of time to make a profit from a title loan. As a result, the laws allow title loans to have a higher interest rate than a traditional loan. Some chains will charge more than others, so always be sure to ask. Secondly, not all rates are set in stone. Many title loan lenders are willing to compromise on rates if you ask. Bottom line is the title loan is meant to be an emergency loan that almost anyone can get in a very short period of time, so be prepared to pay a reasonable amount of interest for the ease and convenience.
3) How do I make my payments? It is essential that you clarify when your payments are due and how they can be made. Some title loan lenders are not able to take payments over the phone or process a debit card payment. Steer clear of a title loan lender who insists on cash only. Also, some title loan lenders insist on payment in person, which can be rather inconvenient, especially if their hours are limited.
4) Can I depend on their customer service? Right from the first time a phone representative calls you about your title loan to the last payment on your loan, you are dealing with people. They are the essential link between you and your title loan company. Always seek out excellent and intelligent customer service and staff and you can’t go wrong. The human factor is crucial. I have received many complaints from people who say “They treated me like they were doing me a favor to answer the phone.” Choose a title loan lender who appreciates your business and let’s you know it.
5) How am I going to pay my title loan off? Like any financial decision, you need to have a plan going in. Put it on paper and figure out how much you need to budget each month to pay off your title loan as fast as possible. No one ever plans to fail, they just fail to plan.
DISCLOSURE OF MATERIAL CONNECTION: I have a direct relationship with a brand, topic, or product that is mentioned herein and may have received compensation, either directly or indirectly, for the opinions expressed.