1: Find out what type of payment options are available
You not only want to inquire about how the car title loan lender will take the payments from you, either straight from your paycheck or if you’re paying them directly. You’ll also want to know how many months your title loan will last. Just like other types of loans the longer it takes to pay off your loan the less you’re going to be paying each month. The downside of that is the fact that you’re going to be paying more each month in finance charges. Do all you can to make sure your car title loan is outstanding for the least amount of time as possible.
2: Know what the online application & approval process is before you apply
Much like some of the other tips here, this is more to save you time more than anything else. Some lenders that offer car equity loans will allow applicants to complete the title loan application completely online. Others will require you to do an online application and complete a phone verification as well. Most companies that fund online car title loans will be able to verify your application in 20 minutes or less but some can take much longer. On top of this, you’ll want to know whether your lender requires a visual inspection of your car. Oftentimes this can be done when you pick up your check.
3: Be sure you know how long it will take to get your cash
It can take anywhere from a few minutes to a matter of days to have cash in hand from your online title loan. If your online lender has a local physical branch you’ll probably be able to fill out the application online and pick up your cash rather quickly at that location. Also, some companies that fund car title loans will send the cash straight to your bank account. If they do this make sure you find out how much they’re charging to initiate the bank ACH.
4: Ask the lender what type of car they accept
You’ll want to do this before you fill out the online application and go through the process of getting qualified. Most lenders that offer car title loans online will accept vehicles that are newer than 2000. Some will allow vehicles that are from 1995 or sooner. The mileage on your car can be an issue as well. Definitely, ask your lender what their mileage restrictions are if your car has a mileage over 100k. Make sure your vehicle has sufficient equity. With that, there should be no issues when it comes to getting funded for a title loan online.
5. Make sure you can keep driving your car
Did you know some car equity lenders will require you to impound your car with them for the life of your loan? Some online lenders will also install a tracking device on your car. This means they will also know where you are. We’re seeing less of this as car title loans are becoming more and more common. Be sure you get to keep your car while you’re paying your title loan off!
6. Know how much it’s going to cost you
Sounds simple enough but many consumers fail to ask how much their title loan is going to cost them. Did you know that some online lenders will charge half of what many of the largest companies charge? Don’t be hesitant to shop around for the best interest rate. Also, check your title loan contract for extra fees or charges that you’re not familiar with.
7: Be sure the lender is licensed to offer online title loans in your state
You won’t be able to get a loan if your lender is not licensed to offer online title loans in your state! It’s that simple. Each state has individual requirements that an online car title loan lender must meet in order to be registered. If a lender is not registered in your state they’re probably not going to offer you a car title loan. This is more common than you’d think. Many of the largest companies that fund online car title loans can only fund loans in a handful of states. Check your state’s eligibility before you apply! This also applies to retail lenders. Even though they may have a physical location in your state you will still want to see if they’re licensed.
8: Ask your lender if they charge a pre-payment penalty
The interest clocks start running the day you get funded for a title loan online. Because of that, you’ll want to make it a goal to pay off your car title loan before it comes due. If you’re able to do this you can eliminate costly interest charges that you’ll be hit with for the life of the loan. The only way this works though is if you’re not charged a pre-payment penalty. Most firms that offer online title loans will not charge a pre-payment penalty to pay off your title loan but some still do. Be sure to verify whether or not your lender has a penalty before you sign off on any car title loans!