When you need money on the quick, but have low credit scores, the best thing is to take a Phoenix auto title loan from Auto Title Loans USA as you can keep the vehicle and still get loan on it. Before you actually go ahead to take a title loan on your car, here are some quick tips to read to avoid the pitfalls.
Working of a car title loan
You can get an auto title loan if you put your vehicle up as collateral, but you need to have all of the ownership papers. The car title loan amount varies depending upon the model and condition of the car. Some of the Phoenix auto title loan lenders will allow you to borrow nearly 50% of the car’s value but title loan amounts varies depending upon the lenders policies and your car’s value.
If you don’t own the car yet and are making the payments on it, the Phoenix car title loan from Auto Title Loans USA amount will vary and it will be determined by the total equity you have on the vehicle. If you have paid off $4000 on a $6000 value car, you still owe $2000. The lender will calculate the loan amount on the $4000 equity you have. So if you are eligible for a 50% of the value, you can get Phoenix car title loan of $2000. But if the car was complete paid for, you could have got $3000 as loan amount.
The lenders keep the vehicle as collateral, you can still keep your car and they don’t even need a credit score check. But the downside is that the interest rates are really high and that varies among the lenders. It is best to shop and compare to save money on the interest. Additionally, it is equally important to plan about the repayment before you take a Phoenix secured loan such as a car title loan. This is not a loan you can really afford to default on because you will end up losing your car. Other options when you have a low credit score include business loans, payday cash advance loans and personal credit loans.
Mistakes to avoid
When you are looking for a lender or Phoenix auto title loan company, look at the company’s track record and the reputation. Talk to customers who have availed a car title loan from that company. Has their experience been good? Are the policies fair?
It is best to compare at least 3-4 different loan companies and read through the loan policies before you sign the dotted line. It is essential that you read through the complete documentation on the car title loan contract before you sign the contract. Review all of the terms and conditions that will be applicable if you extend the period of repayment. Check the penalty clauses and pay attention to the requirements for insurance.