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Consumer Finance Loans

Consumer Finance Loans

If you have bad credit, then your options are limited for getting a personal loan, as all traditional lenders will require that you have good credit to get a loan from them.

Thankfully, there are different types of consumer finance loans for people with bad credit, but one of the fastest and easiest ways is to use the equity that you have in your car. Car title loans and title pawning have become popular for people with bad credit who need to get some fast money.

But it can be difficult to know what would be the right company for you to choose, because there are so many car title loan companies out there, and they all seem to offer the same thing.

Many companies will offer you the money within twenty-four hours, but some companies charge interest rates that are triple digits!

It is important that you find a company that will charge you a low rate. Even though title loans are more expensive than bank loans, you must not go with a triple-digit title loan. The Consumer Financial Protection Bureau oversees all title loan companies, so it is best to make sure that they are in compliance with them.

Finding a title loan company that will offer you the payments and the money that you need will take a little bit of shopping around, but it is well worth it.

Trustworthy Title Loan Companies

Car title loan companies’ rates will vary from company to company, and from state to state, so it is very important that you spend your time finding the company that is best for you. Of course finding the lowest rate is the best thing to do, but you also want to make sure that the terms will also work for you. You want a title loan with a 36-month term, with no prepayment penalties.

Stay well away from all of the short-term 30-day title loans; they are debt traps, and the rates are very high too. Also, stay away from title loans with balloon payments.

You want to make sure that the title loan that you are going to get is amortized, so your payments will go towards your interest and your principal.

Defaulting on Your Title Loan

If you have a title loan with triple-digit interest, and a short term, the likelihood of you defaulting is much greater than with a lower interest amortized 36-month title loan.

Repossessions can happen with all types of car financing, but if you can get a title loan with monthly payments that will fit into your budget, you should be fine.

It is also important to ask for a title loan with no prepayment penalties, so if you have a 36-month term, but you are able to pay it off at any time, this is a good title loan for you.

Look for a title loan company that can help you to get the best terms, so you do not have to worry about repossession.

Shopping for Title Loans

When you are shopping for title loans, do not rush and do not choose the first company that you speak to or to whom you apply.

Remember that your interest rate will have an impact on your monthly payments, also the length of the title loan will also have an impact on the payment.

While shopping for a title loan that will give you the money that you need, some companies will lend you up to 85% of your vehicle’s wholesale value. You can look up your wholesale value with Kelly Blue Book.

Choose a Title Loan Company with Good Reviews

When choosing the right car title loan company online, you will need to check out their online reviews. If they are an established company, they should have plenty of reviews online with Google, Yelp, or the BBB.

When you are shopping for a title loan company, look to see if they answer their reviews. This will give you a good idea if they care about their clients.

Do not choose a company that only has a few years of experience, because they will not have the experience to help you with difficult situations. Experience will make a big difference when choosing a title loan company, so it will be best to go with one that is well established.

Finding the Right Lender for You

Title loans have helped thousands of people, but there are also many people who wished that they never took them.

Finding the right company with the right interest rate for you will make all the difference, so it is important to do your research.

With a lower interest rate, you will of course save a lot of money, but your monthly title loan payment will also need to fit within your budget.

Car title loans and title pawns are more expensive than regular bank loans, but if you do need to get them, they can be an excellent way for you to get the money that you need.


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by Dirk DeBie // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.