A car title loan is a secured loan with the car’s title as the collateral. The lender becomes the temporary owner of the car until when you’ve paid back the loan entirely. Due to the easiness in applying for a car title loan, it gained some popularity, especially in Orem, Utah.
Nevertheless, before getting a title loan, you need to consider some factors to avoid finding yourself on the wrong side of the law. Here are the three most common factors:
What Payment Options Do You Have?
Before getting a title loan, know how the lender requires you to repay the amount. Is it by check or direct payment? Get to know the interest rate, the repayment period, and what will be your monthly installments as well. Of course, the longer the repayment period is, the lower the monthly payments.
Know the Application and Approval Process
The process of applying for a title loan is not a one-size-fits-all. Some lenders require online submission and verification of details, while others need your physical appearance or phone verification. However, an online title loan application saves you time and the much paperwork you would have done.
Know the Type of Cars the Lender
Before taking that car title loan, ensure that the lender accepts the type of your vehicle in exchange for the loan. Ask whether the lender will allow you to keep driving your car. Not all lenders allow that and those that do may still require you to put a car tracker on your vehicle so they can monitor it. Others will need to keep your car till you repay the loan fully.
While you might be taking it for granted since it’s available in Orem and other parts of Utah, not all states offer this kind of loan. The states that do have strict laws and regulations on this form of lending. Therefore, you need to be careful when applying.