If you really think that a car title loan is your best option and don’t mind the risk of losing your vehicle for much less than it’s worth, there are many online lenders for car title loans to be found. While interest rates might appear to be lower than installment loans or payday loans, there is a very real possibility that you might lose your vehicle for defaulting on payments. If this is the case, then this would make car title loans the most expensive option of all.
But if you are determined to do so, make sure that you are fully aware of the following:
- Total cost of the loan – including principal, interest, and fees
- Payment amounts with due dates
- Overall interest rate of the loan
- It’s also important to know whether you have the option to pay off the loan before the end of the term, without any sort of penalty fees for early repayment.
- Before pursuing a title loan, the lender will want to know whether you own the vehicle, whether you have paid it off (or most of it, usually 80% or more), whether you are a permanent resident, and if you carry insurance for the vehicle. You will also need to provide a driver’s license along with bank statements.
The only true advantage of a title loan over other options is that there are some lenders of title loans that do not require you to be employed. If this is the case for you, the odds might even be higher that you will not be able to make those payments and lose your vehicle. Nothing is a sure thing, until it happens, and if you are hoping or believing that a job will happen or you will come into some money and take care of the title loan later, you’re gambling with losing your vehicle for far less than it’s worth. Depending on the make and model and year, this can mean a loss of thousands of dollars to you.
You owe it to yourself to look into an option such as installment loans over title loans as they can often be the better option for many.
Title loans are typically available in Ontario, Quebec, Alberta, British Columbia, and most other provinces or territories in Canada. But before you decide this is the right move for you, here’s some other details you should know beforehand when considering them.
When you take out a title loan, some of the fees you might have to pay can include;
- Evaluation fee – to get insight to the vehicle’s current market value
- Search fees – to check if the vehicle has been in an accident
- Title Search fees – to check if there is a lien on the vehicle
- Admin & registration fees – miscellaneous fees some lenders add
- Installation fees – if they require a GPS unit is installed to track their investment
As you can imagine, all the extra title loan fees can quickly add up to much more than you might have originally anticipated.
But the main thing that most should be concerned with is how the loan provider or lender of title loans will undervalue your vehicle. You might say that they actually hope that you default on your payments. This will allow them to repossess your vehicle and sell it. Remember, they typically only offer half of the current market value. So in addition to anything they’ve made on fees and interest, they can also profit by selling your vehicle if you fail to make payments