Demystifying Myths on Title Loans

two people shaking hands with car keys on the table

Everyone can experience emergencies regardless of their financial condition. Furthermore, these emergencies do not choose the time they happen. Emergencies that need financial attention can easily offset one if you do not have any cash at hand. Title loans in Salt Lake City are one option that individuals in need of urgent cash can use. However, not many people are not comfortable with taking these loans due to the information around the subject. Here are debunked myths on title loans:

The Lender Checks Your Credit Rating

Lenders consider the fact that you can afford a car under your name. When you take an auto title loan, the motorcycle or car serves as the loan collateral. Instead of checking the credit score, the company representative will confirm whether the documents you present indicating ownership are genuine. These loans are secured loans, and the lender has minimal risk of loss when you default your loan.

The Loan Interest Rate is High

increasing interest rate conceptIs it your first time to apply for any secured loan? If yes, you are aware that interest rates for loans vary from a lender to another. Also, interest rates depend on multiple factors such as loan repayment terms and the amount of money in question. Short loans and loans of less amount have low-interest rates.

Penalty Charges for Early Payments

Loan repayment terms dictate that you pay a certain amount of money as the monthly installment. There is however no limitation to the amount of money you can pay monthly. The more the amount of money you pay monthly, the faster you repay your loan. The company will not charge you any amount as a penalty for repaying your loan early enough. If anything, you will increase your chances of securing another loan.

You Cannot Have a Car after Taking the Loan

When taking the title loan, the creditor gives the lender the car title and not the car. So long as you are paying the monthly installments on time, you will continue using your car. The lender can demand to have your car once you default making the payments. That means that it is a win-win situation for you when making the necessary repayments; you keep the car and have the money.

Repaying Title Loans is Hard

Title loans are not much different from the other types of loans that you have probably taken in the past. The loans have strict terms on the repayment terms to save the lender from losing their money. Proper planning before taking the loan will ensure that you have a strict plan to repay your loan. Constant communication with the lender’s representative on making timely repayments will also help you in clearing the loan.

The company that you will be taking your title loan from in Salt Lake City is also a big factor to consider. Ensure that it is a registered lender whose best interests are to serve clients. Research about different companies while checking out their requirements and rules. Lastly, go through every term in the loan agreement document, and if there is anything unclear, seek further clarification. There are loan experts who will explain all the details to you to see that you make the right decision.