Apr 6, 2013

6 Keys To A Great Car Title Loan

In the modern American society, cars have ceased being a luxury and have become essential in the day-to-day life. It is always a delight to hold the keys to a brand new car of your own. Many people desire to own a car but the main challenge is paying for the car. Since many do not have the cash to buy their own vehicles, the only option is to take an auto loan to be able to pay for the car. However, at times, you face certain emergencies that require a huge sum of money and you are forced to take a car title loan.



Here are six keys to help you obtain a good title loan:

Key 1: managing your credit

Before you apply for a car title loan, you need to ensure your credit score is solid. This means you have to manage your credit wisely. All US citizens are entitled to one free credit report annually. Use this resource to review your credit before you apply for the loan. If there are any bad habits or errors, you need to fix them before going to the credit company since they may affect the interest rate of your loan.

Key 2: be aware of your spending limit

Diligent consumers should know how much they should spend. Sadly, though, many consumers are not diligent budgeters. It is vital to track your budget and determine how much your payments will be. To achieve this, you can use various tools such as Microsoft Money to track your budget and car payment calculator to find out the payments you are supposed to make.

Key 3: take into consideration the big picture

The terms of your specific car title loan will dictate how much payments you make now as well as the overall cost of your car title loan. It is vital to keep in mind that an initial lower cost does not automatically mean your title loan cost will be lower in the end. For instance, many consumers choose an option where they have to pay low down payment since it is easy to manage at the present. However, this choice may increase the total cost of your loan.The trick is to figure out how your loan will look like exactly each month before taking the deal.

Key 4: do not forget insurance

Before applying for a car title loan, it is best to buy an insurance policy. The two best options would a life insurance policy or disability insurance. When you walk in a lender's office, one of the first things he or she will want to know is whether you have an insurance policy. All lenders are concerned about what will happen to their money in case something happens to you and you are not able to pay. If you do not have insurance, you will pay higher interest rates than someone who does.

Key 5: escape prepayment penalties

In life, things do not always remain the same and flexibility is essential. Your title loan should give you a measure of flexibility. It is advisable to find a lender who will allow you to pay off your loan completely without any penalties. Make certain you read the fine print of the contract before you sign it.

Key 6: shop around

You do not have to get an auto loan with the first lender you come across. Doing so could prevent you from obtaining the interests rates for your loans. Shop around for other dealers and see what they are offering. In addition, do not limit yourself to one option but aim to explore other types of lenders.

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