There are many different types of loans available that can benefit you today; however, a common type many people take advantage of is a title loan.

What is a Title Loan?

This type of loan is a small sum loan that can give you short term money. To take advantage of this loan you allow title loan providers to hold the title to your car, or other vehicle, and pay a small fee to acquire the loan. Most commonly this loan is paid back within 30 days; however, different title loan companies will have different options.

What You Need to Know

In order to get a loan either in person or online you will need:

  • A filled out application usually provided on the website or in person.
  • Your car title, and possession of the car.
  • A valid photo identification card.

Some title loan services may require a copy of your car key as additional collateral, or certain insurance standards to be met; however, this varies by loan company. When the allotted time is passed and you pay back the loan, you will be responsible for the borrowed amount as well as a fee. The fee in question can be as much as 25% of the original amount borrowed, and is something to keep in mind when borrowing. Comparing the APR between lenders can help you determine which is the best choice for you. If the loan is not paid, and no further arrangements are made, a repossession order for your car may be issued.

What is APR?

The annual percentage rate is determined by:

  • The total amount borrowed.
  • The interest rate.
  • Any additional fees.
  • The amount of time the money has been borrowed for.

    • What to Keep In Mind

    Title loans are a short term solution, and can be expensive over time due to interest APR rates. Compare the APR, fees, and time allotted to repay the money, so that you can get the best deal possible when taking out the loan.

    Don’t be afraid to ask any questions you may have to the lender before making an arrangement. Have them explain the APR in dollars, so you will know just how much you will be responsible for repaying when the time comes. Only borrow what you know you can reasonably pay back; over drawing can potentially lead to your car being repossessed, and that can only compound the problem. Try to be as informed as possible, and you should have no issues when it comes to navigating a title loan.