Title loans are one of the most common types of loans. These allow you to borrow money from a lending institution using your assets as a security deposit. The most common asset used in title loans is a vehicle. Of course, it has to be a vehicle under your name. No exceptions.
Utah title loans are an ideal option if you have a low credit score that might prevent you from accessing traditional loans. These also help you avoid the long process of conventional loans, especially in emergencies.
Here are some important considerations you should take into account when applying for a title loan:
Loan Repayment Period
Title loans are a convenient option when you need cash quickly, as it has a short repayment period — around 30 to 60 days. You have to make sure, however, that you can repay the loan within the set period. Ask about the penalties for late repayment or if there are waivers for paying early (before the repayment deadline). In some cases, you can extend your repayment period by “rolling over” the loan. This will cost more, however.
Most title loan creditors have a fixed amount of loan that they can advance to their borrowers. Make sure that the creditor you select can advance the amount of money you require. Most lenders have a $10,000 limit, but some can go up to $50,000. The value of your car should match the amount of money you want to borrow.
The interest rate for title loans is typically calculated on a monthly basis. If your lender is advancing the loan at 3% interest, for example, this amounts to 36% per annum. You can negotiate with your creditor for favorable rates. Some will offer competitive rates that fit your needs.
As mentioned, for you to qualify for an auto-backed title loan, you should be the outright owner of the car. Should the car title loan terms not be favorable for you, there are still various options available. Check with your creditor to know what fits your situation.