There are many myths out there surrounding auto title loans. The largest myth is that once an individual takes one, they will probably lose their car. In fact, a growing number of consumers are experiencing quite the opposite and successfully paying their loans off on a daily basis.
Since many traditional banks are limiting the lending of money to those with near perfect credit scores, millions of Americans with less than perfect scores are left to struggle when an emergency arises. This is why car title loans are becoming more popular each day. For those have recently taken money out against the equity of their automobile via an auto title loan or for those considering one, the following recommendations will come in handy:
- Know the Terms and Conditions of the Auto Title Loan – It is vital that a consumer know exactly what is expected of them – such as how many payments are due, the interest rate, late/missed payment penalties, and more.
- Budget for Monthly Loan Payments – Make sure that enough money is set aside to make each monthly payment on time. This may mean cutting down on entertainment funds, decreasing a cell rate plan, cancelling cable, or other bold money saving measures. If for any reason, a payment is late or missed, one may be subject to additional fees and/or increased interest rates.
- Set Aside Some of the Loaned Cash for Monthly Payments. At the time of an auto title loan it may be beneficial to put aside a portion of the cash gained for a handful of monthly payments. This gives an individual a bit of time to get on their feet financially, while still making payments in full and on time.
- Plan to Pay a Car Title Loan Off Early if Possible – The earlier a title loan is paid off, the more a consumer will benefit. One of the advantages of an auto title loan is that there is no penalty for paying the entire off early.
As the demand of auto title loans continues to grow over time, the market is expected to become more competitive. It is recommended that consumers get to know their title lenders and create an equitable relationship until the loan is paid off in full.