3 Key Factors to Consider When Taking a Car Title Loan

Pen and car title documents being handed by a salesmanA 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.

Starting a Business: 3 Ideas for Raising Capital

Businessman counting his assets to invest as funding on a new businessBeing an entrepreneur these days mean that you have to be capable of thinking out of the box, especially when it comes to raising funds for your startup. Capital isn’t easy to find, and sometimes it takes more than just creativity and business intelligence to get the cash you need.

Depending on the kind of business you’d like to set up, there are different ways to come up with the money you need. It may be a combination of several of these suggestions:

Take out a loan

The amount of money you need will dictate where you can apply for a loan. You may try your bank, but that kind of loan — while possibly substantial — needs security with a collateral. You can also take out smaller loans for short-term needs. A cash loan, as Utah Money Center cites as an example, can be a real lifesaver if you need money right away. All you need to remember is you should be capable of paying it back within a short time.

Use your own money

It’s common for entrepreneurs to use their savings or whatever resources they have to fund their business initially. You may even use a zero-interest credit card to buy some of the things your business needs.

Borrow from your friends and family

This is perhaps the most traditional way to raise capital. Borrowing from family and friends has its upside. They are more likely to trust you and believe in your vision for the business. The downside is if you break your promise to pay them back, your personal relationship may suffer. It helps if they can loan you the money for at least a year, and you should initiate a binding contract regarding payments.

Any kind of business entails some risks and responsibilities. Many entrepreneurs struggle during the initial phase of their business, particularly with cash flow. You need a higher kind of resolve and dedication to succeed and to honor your loans.

The Things You Thought Were Right About Title Loans

Title Loans There are two reasons some Utahns are reluctant to apply for a title loan: sharks and myths. The fear toward the former is understandable; given the growing number of horror stories you hear, and probably based on experience. However, believing the former is both unfair to honest moneylenders and to yourself.

Applying for a title loan is not like making a pact with the devil. Some lending companies may offer one-sided deals, but others sincerely mean honest business—something favorable to both parties

If you’re in dire need of instant cash, your must first put the following misconceptions to bed to see the real benefits of title loans:

You’ll Surrender Your Car

There’s a reason it’s called a car title loan. According to Utah Money Center, the only collateral needed in this transaction is the title, and you get to keep your car just like nothing happened. Unless you default on your payment, nobody would take your ride from you.

You Can’t Pawn Other Vehicles

Title loans are not limited to just cars. Some lenders now also accept trucks, ATVs, motorcycles, snowmobiles, and other types of vehicles. The company, however, may hold your vehicle until you pay off your loan. But this allows you to borrow a high percentage of your vehicle’s value.

Your Credit Must Be Perfect

Lending companies will run your credit check not because they have a credit score requirement, but to protect title owners against ID theft. There was one case when the owner’s title was stolen and got pawned, it resulted to repossession.

You Get Nothing but a Rip-Off Rate

When you apply for a car title loan in Orem, Provo, or Spanish Folk, you can determine how competitive the interest rate given to you by getting quotes from different lenders. In addition, the fact that you’re providing a collateral makes the loan secure for the company, which can help lower the interest they have to impose. On the contrary, some lenders may even reward you by paying on time in the form of decreasing interest.

A title loan is only risky if you don’t know what you’re doing. Exercising your due diligence and being financially prudent lets you know if you’re dealing with a shark or an upright lender.

Title Loan: Requirements and Risks Explained

Loan in Utah Being on the brink of default is a very frustrating experience. While your attempts at improving your overall credit standing seem to be not bearing any success at all, you may be tempted to resort to what some consider a kind of predatory lending. With interest rates that can be more than a hundred times greater than other types of loan assistance, title loans have nonetheless become the last resort for cash-strapped consumers and property owners.

What is a Title Loan?

Considered a pink slip loan, a title loan is a kind of loan assistance where the borrower uses his vehicle as collateral for the amount of loan he wishes to secure. To put it quite simply, you exchange the title of your car for a loan.

What are the Requirements to be Eligible for a Title Loan?

According to Utah Money Center, compared to other types of title loans, you only need to have very important thing: the irrefutable proof to the ownership of your vehicle. This means that you must be able to provide adequate and valid proof that you are the owner of the vehicle that you are using to secure a loan. As such, you will be required to show valid ID, the current registration papers of your vehicle, and proof of vehicle insurance.

In relation to your valid ID, you will also be required to submit documents that pertain to your source of income as well as residency. Some lenders might also require a GPS device to be installed in your vehicle to allow them to keep track of its whereabouts. Others will require you to surrender your car keys altogether.

How Much can You Loan?

The amount of your loan will depend on the value of your car. Many of the lenders often refer to the Kelly Blue Book to determine the resale value of your car. Generally, the maximum amount of loan will be around 50 percent of the resale value and at an interest rate that can range from 300 to 500 percent.

What are the Risks?

Well, if you default on your payments, you eventually lose your vehicle.

Title loans should always be your last resort. And even if you find yourself backed against a wall, the exorbitant interest rates plus the risk of losing your vehicle are just too great.

Your Car = Instant Money: Should You Go For It?

title loan in UtahIn simple terms, a title loan, also known as car title loan, auto equity loan, vehicle title loan, auto title loan, or pink slip loan, allows you to augment your income by having your car serve as collateral for a loan.

How a Typical Title Loan Works

To start, you bring in your car along with its original title to a lender and then have them appraise its current value. The lender will use your car’s equity to determine the loan amount offered to you; unlike a collateral loan in pawnshops, you actually get to keep your car during the loan period you and the lender agreed upon. Once you default on your loan however, the lender will own your car and the sell it off to get back the loan amount you borrowed.

While a title loan may seem like a double-edged sword, it is a viable option for when you desperately need funds but are not capable of qualifying for a loan through traditional lenders or even a cash advance on your credit card. If you have a less than perfect credit history, but legally own a valuable car and have regular income, a car title loan can make sense in the event of emergences or other costly incidents when you can’t obtain a loan anywhere else.

On Title Loan Risks and Lenders

A car title loan is only “bad” when a lender is not exactly forthcoming regarding the specific details of the loan’s terms. While the interest rate on a vehicle title loan can be significantly higher than traditional loans, this usually serves as assurance to the lender since majority, if not all lenders, don’t check your credit; much less ask about your credit history.

Yes, title loans can be risky when you default on them, but lenders are giving you credit with no guarantee that you’ll actually make good on your repayments. They are banking on the fact that you only have your car as collateral and the potential amount they can get for your car when you fail to pay off your loan. Bottom line — since title loans are not cheap, you have to know exactly what you are basically getting into and research your options well since there are many reputable title loan lenders out there as there are unscrupulous ones.