The 3 Most Costly Title Loan Mistakes to Avoid
Making any important financial decision without taking a moment to examine all the pros and cons can lead to completely avoidable and costly mistakes. Here are some simple strategies for making a sound decision when choosing a title loan provider in the state of Utah.
Research the Loan and Match It to Your Circumstances
Rule one is to never rush into anything. Take time to examine all qualities of a potential loan provider. That goes for any company you do business with, but you’re your finances are involved, it’s twice as vital. Some questions you might want to ask yourself are:
- "Is this a short-term or long-term situation for me?": While a title loan could be a viable option for unexpected expenses and cash emergencies, it is important not to rely on them for long-term financial problems. They are a tool that could help you deal with an emergency situation and should be paid back as soon as possible to minimize their expense.
- "Will this be a one-time thing, or will I be using a title loan again in the future?": For many individuals, getting a loan of this type could be a once in a lifetime experience during an unexpected cash emergency. For them, they may not be looking for anything more than speed and convenience in a lender. For others who use these products more often, their priority may be finding a provider who they can form a relationship with over time. In either situation, it is important to work with a provider who treats you with respect and is a trusted and reliable member of the business community.
- "What are the terms of the loan?": Here is where people can really get themselves into trouble. It is critical to educate yourself on the total cost of the loan. This includes the APR, fees and any other associated costs. Ask yourself if you can get a better rate somewhere else and research each lender thoroughly to understand the overall cost of the loan.
Don’t Borrow More Than You Can Repay
At first, it might make sense to get as big a loan as possible, but this is not necessarily true. You need to examine your personal finances to make sure that whatever loan amount you take on, you can pay back in a timely manner.
For example, there are reputable licensed providers in Utah offering title loans up to $15,000, regardless of the individual’s credit score. But $15K is a lot of money to borrow and probably well beyond the needs of the average borrower. You will need to compare your needs with your budget and the amount you could qualify for to determine how much you could borrow safely.
Use the Cash from Your Car Title Loan Conservatively
Once you've found the right provider and completed the approval process, it is important that you proceed with caution. Do not get caught up in the excitement of having a large sum of cash in your hands. You should always have a plan in place ahead of time and every dollar should be earmarked with a purpose.
How Do Title Loans Work?
A Utah title loan is a short-term loan that is meant to help individuals who need emergency cash. They are secured by using your vehicle’s lien-free title as collateral. The lender will hold the title during the repayment period and return it to the owner once the loan has been repaid. In many cases, the borrow continues to drive their vehicle while making the payments on their title loan.
In order to qualify, the automobile being used to secure the loan must be fully paid off with a lien-free title. That means no other individual or institution has any claim to it. You will also need to provide a legal photo ID and bring your vehicle to a store location for an inspection. The process is usually fairly simple, and in some cases, it is possible to complete the paperwork and get cash in as little as 30 minutes.
Benefits of Title Loans
- If you're in a tight financial bind that demands fast cash right away or if you lack access to traditional sources of credit, a title loan could be the right choice for you.
- Having bad credit could prevent you from qualifying for a large majority of loans, but not title loans. That is because these loans are issued based on your vehicle’s value and secured by the vehicle’s title, which means your credit history isn't a factor in being approved.
- You keep and drive your vehicle while repaying.
- The process is fast: It can take as little as 30 minutes to go through the approval process once you arrive at a store location.
How Much Cash Could You Get?
If you're in a stressful situation that requires emergency cash today, take a moment to fill out the easy online request form on the Utah Title Loans, Inc. website. In a matter of minutes, a store representative from your closest location will call you back with the details. Cash amounts are available up to $15,000, so get started now.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.