Title Loan Buyout
Apply To Banks That Buy Out Title Loans
What is a car title loan?
A car title loan is a loan for a small amount of money for a short time.
To get a car title loan, you give the vehicle title to the lender – for example, the title of your car, truck or motorcycle. In addition, you pay a fee to the provider. Generally, you have to repay the loan in 30 days.
Car title loans can be very expensive. If you cannot repay the money you owe, the lender can keep your vehicle.
Are there other ways to borrow money?
Maybe you could ask for a loan of money from:
- Family or friends.
- A bank or a credit union.
- Your credit card
You could ask for more time to pay your bills. You can talk to a credit counselor for help.
How do car title loans work?
You can get a car title loan on the internet or in a store. These loans work like this:
Step 1: You show the provider:
Your loan application.
The title of ownership of your car.
Your ID card with a photo.
Some providers also require you to give them a copy of your car keys or to buy a roadside assistance plan.
Step 2: If the lender approves your loan, he gives you the money and keeps the title of your car.
Step 3: When the loan repayment date arrives – usually in 30 days – you pay the lender the amount of money you borrowed – plus a monthly fee or you refinance with a title loan buyout.
How much does a car title loan cost?
Providers charge a monthly fee. This charge can be very high – sometimes it can reach up to 25% of the loan amount.
You want a $ 1,000 loan for 60 days
The monthly charge is 30%
$ 1,000 x .30 = $ 300
After 60 days you owe $ 1,600
How do I compare the costs?
Most loans have an annual percentage rate. The annual percentage rate is also called APR. The APR tells you how much it costs to borrow money for a year. The APR of car title loans can be very high.
When you get a loan with a car title, the lender must tell you what the APR is and the cost of the loan expressed in dollars.
What is an APR?
The APR is based on:
- The amount of money you borrow.
- The financial charge or the monthly interest rate.
- The amount you pay for the charges.
- The period of time of the loan.
- You need a $ 500 loan. You have plans to repay the money in one year.
- You compare the costs of taking a loan for that amount of money:
- The bank or credit union provides loans with an APR of 7.5%.
- You will pay $ 21 interest for the $ 500 loan.
- A credit card has an APR of 20%.
- You will pay $ 56 of interest for the $ 500 loan.
- A car title loan has an APR of 300%.
- You will pay $ 1,111 of interest for the $ 500 loan.
What happens if I cannot repay the title loan bank on the established date?
You may not be able to pay the provider on the set date. The lender may allow you to continue with the loan for another 30 days. This is called “refinancing” the loan or “extending the term” of the loan. To extend the loan term, you will pay another monthly fee.
If you extend the term of your loan several times, you will pay many interest. Over time, you may not be able to repay the loan to the lender.
What happens if I can never repay the loan?
If you cannot pay the lender the money you owe, the lender can keep your car. This is called repossession. The lender can sell your car and keep the money.
If the lender keeps his car, you could lose his only means of transportation. It could be harder to get to your workplace, school and other places you need to go.
A car title loan is a loan for a small amount of money for a short time – usually for 30 days. It can be a very expensive loan. If you cannot pay the lender, you could lose your car.
What should I do before taking a car title loan?
Before taking a car title loan, consider other options:
- Can I get a loan at a bank or a credit union?
- Can I get more time to pay my bills by talking with creditors or a credit counselor?
- Do I have savings available?
- Can I borrow money from family or friends?
- Can I use a credit card instead?
How do I choose a way to take a money loan?
If you have more than one option, compare the costs. For each option find out:
- What is the APR?
- What are the charges?
- How soon should you repay the money?
- What happens if you can’t repay the money?
Write down the answers to these questions. Decide what is your best option.
I decided to take a car title loan. What should I do?
Ask the lender to tell you how much the loan will cost in dollars.
Ask the lender to tell you what the APR is.
Only borrow an amount of money that you can repay on the date set to repay the loan.