How to Get a Title Loan

Kilowatt Car

There are different types of loans. Typically it is a true axiom that the less a person needs the money the less the interest on the loan will be. The least desirable loan to obtain is a title loan. By its nature, it is a "last ditch" attempt to avoid a major financial problemThe only time a title loan should be used is when you have a large amount of money coming in, but you have immediate cash needs before your new income stream arrives. Your new stream should be enough to pay off the entire title loan, ideally.

Instructions

1. Research every possible source for a loan. See if your car title is potential collateral for a loan. The problem is that banks are limited to the age of cars they can lend money for, and often, commercial lenders like loan companies are legally prevented from lending money on a car title.Title loan companies are able to loan something on almost any car.

2. Take the car you wish to encumber and the title for it, and begin a trek to at least five title loan companies. In most cities there are not many companies, so pick five from different chains, and try different areas of town. Ask what the necessary requirements are for getting the loan, what they think they can loan on your car, and what the payments would be. When asking the payment amount, ask how much of the payment would go towards principal.

3. Pick the company you wish to do business with. The application process will typically consist of providing the company with about six family members' contact information. Additionally, you will probably be asked to provide mail verifying proof of your address of residence and sometimes proof of utility ownership.

4. Be prepared to act quickly once the loan is on the books. For example, a 1991 car with a loan value of $300, can yield a required payment of $90 per month before any money goes on the principal. Also, as part of your loan, you will be required to pay for the title transfer, which is around $65.

5. Act as quickly as possible to retire the debt. It will be difficult. Make small payments throughout the month. This can help reduce principal. If you get behind the interes,t will simply build up. If you were in financial trouble before you took out the loan, your chances of recovery once you are behind are slim. The company will waste no time repossessing your car.The title loan provides a last ditch attempt at weathering a financial storm.

Tips & Warnings

• Make sure and research the company you do business with...there are loan sharks in this field.