Tips For Taking Out An Auto Title Loan

Having unexpected expenses that you can't afford to pay for can be very stressful. When you need money quickly, opting to take out an auto title loan can be a great solution. However, it is never a good idea to take out an auto title loan on a whim. The more prepared you are and the more you know about the process, the more likely you will choose the right loan for you. Use the following tips to help you take out an auto title loan when you need cash fast:

Find Out If Your Vehicle Is Eligible

With an auto title loan, your vehicle is used as collateral for the loan. Thus, many auto title loan lenders have specific requirements for the vehicles that can be used to secure the loan. Many auto title loan lenders stipulate that a vehicle may not be older than a certain year, and there can also be mileage limits. Before you go through the process of applying for an auto title loan, it is always in your best interest to find out if your vehicle is eligible.

Understand Your Payment Options

After an auto title loan is issued, you will then have to begin paying it back according to schedule. Different lenders have different payment requirements. Some may offer monthly payments, while others may require bi-weekly payments. You will need to know what type of payment options are available, as well as the length of the payback period. Also make sure you find out if you can schedule your payments or if they will be automatically debited from your checking account. 

Ask About Repayment Penalties

Before you take out an auto title loan, always find out if there are any prepayment penalties attached to the loan. With a prepayment penalty, you will be charged an extra fee if you opt to repay the entirety of the loan early. Ideally, you should look for an auto title loan lender that either does not have a repayment penalty or charges a very low fee. 

Learn About the Application and Approval Process

Many auto title loan lenders offer online applications, which makes applying for a loan fast and easy. But, in some cases, you may need to speak with someone on the phone to verify information after you submit your loan application. Some auto title loan lenders may also want to inspect your car to ensure that it is in good condition before funds are dispersed. Take the time to learn about a lender's application and approval process before you apply for an auto title loan.