Great title loans get you money quickly and are a good option if you can repay your loan in full and on time. Finding the right title lender takes time and research. Driving down the streets of Chandler, Scottsdale, or Phoenix, AZ offers no shortage of good loan options, but there are 5 important factors to keep in mind when choosing the right title loan organization.
1. Check the loan company’s license.
The state of Arizona has created its own set of laws and regulations to prevent loan sharking and unfair lending practices. Under Arizona law, all auto title lenders are required to be licensed as “sales finance companies”.
The Arizona Department of Financial Institutions (ADFI) can verify whether an Arizona auto title loan company maintains a valid license. Just a quick phone call will get you the answer you need. Visit www.azdfi.gov for more information.
2. No upfront fee.
Never pay an upfront fee online via wire transfer or in person. You should not be required to pay a cash fee in order to receive your title loan. If your lender requires an upfront fee, walk away. They are responsible for pursuing lenders who fail to comply with state legislation regulating title loan practices.
3. Read every last detail.
Ask your lender every last question you can think of regarding your title loan and do the research to understand every requirement of your loan agreement. Know exactly how much interest you will pay, especially if you miss a payment. Discuss your options in the event you cannot repay your loan on time. If your car is in the process of repossession and you come up with enough cash to pay off the loan, will the lender allow you to pay off the loan and keep your car? How soon will you get your title back once the loan is paid off? These are just a few questions you should ask before you sign your loan contract.
4. Hold onto your paperwork.
It’s happened before and it could happen to you. You pay off your loan and several years later, a lender starts harassing you for delinquent payments on that very same loan. This situation may have been a simple mistake, but it is riddled with hassle and unnecessary stress. Keeping your paperwork in order, especially documents proving your loan has been paid in full, will ensure you can verify the status of your loan at all times.
5. Know your limits.
Only borrow what you know you can pay back. Not being able to pay your loan on time will only bring on more debt in the form of interest and late fees. The moment you consider taking on a title loan, make sure you understand the limits of your budget and what you can afford when it comes time to repaying your loan. You’ll be glad you did when you get the title to your car back in your hands.
If you ever feel like you’re being mistreated by an Arizona title lender, contact the Better Business Bureau (BBB) and the Arizona Attorney General. With the right information, you should be able to choose the title loan that is just right for you