If you find yourself suddenly in need of cash, Texas car title loans for cash can be a quick and relatively simple way to get the money you need. However, if you aren't careful, you may end up paying more than you intended to. Getting the best deal on a car title loan in Texas may take some research and investigation, but spending a little time now can make a major difference. Below are some guidelines to help you get the best deal possible. Read up on them and find out how you can get the best deal on your title loan and title loan interesst rates.
1. Verify That the Lender is Licensed in Texas
According to Texas state law, lenders who offer car title loans must register with both the Secretary of State and the Office of the consumer Credit Commissioner. Legally, companies offering online Texas title loans cannot operate unless licensed by these institutions.
A loan company should be able to provide verification of their license, but if you are not sure, you may want to check with either organization to see if the company is operating legally. Licensed lenders are bound by certain consumer protection laws, so trying to obtain a loan from an unlicensed lender means you may not have any legal recourse if the lender behaves unethically.
2. Understand Interest Rates and Repayment Options
When you obtain any loan, it's extremely important to read the fine print in order to make sure that you are getting a good deal. Many people are so desperate for cash that they hear how much many they can get for their car title and agree to the loan without understanding interest rates.
Lenders of all types make money through interest, and title loans are generally high-interest loans that are designed for short-term or emergency use. Understanding the interest rate on your loan can help you decide on the length of the loan as well. Some people prefer a longer loan with lower monthly payments. While this option often sounds more feasible in the short term, a longer loan means that you will end up paying more in interest over time.
For most people, getting the best deal on a car title loan in Texas means finding a loan option that offers affordable monthly payments while not accumulating a massive amount of interest. Therefore, it's vital to weigh the importance of not paying too much interest against the importance of having low monthly payments.
If weighing these options is challenging, it may be helpful to calculate how much you'll pay in interest over the life of each loan you are considering. This way, you'll know the total cost of each loan before you make your final decision. You may also want to find out if the lender will work with you to set a loan term. Some lenders may offer customized loan terms, while others only offer a few choices of loan terms.
3. Check to See if There is a Repayment Penalty
For many people, facts about title loans that are shocking include the fact that it's possible to pay a large amount in fees and interest on even a very small loan. Calculating how much interest they will pay over the life of the loan can be shocking, and this often motivates people to pay off the loan early if they can.
Paying off the entirety of a title loan early is likely to be feasible if you simply want a car loan as a stopgap measure. If you run out of cash towards the end of the month and realize that you need money for groceries, then taking out a loan and repaying it in full when you get your next paycheck can potentially save you thousands of dollars.
However, this money-saving strategy will only be available to you if your lender does not have an early repayment penalty. If the lender has a penalty, you may be able to pay the loan off early, but you will be penalized in the form of extra fees. Depending on the lender, these penalties can be very high, and they are charged in addition to any interest you have on the loan. It's best to avoid them if you can. Even if you don't anticipate being able to repay early, there's a possibility that situation might change, and you don't want to have to pay more than you have to.
4. Compare Quotes
If you're committed to getting the best deal on a car title loan in Texas, one of the best ways to do so is to compare rates. Before making a decision, be sure to carefully investigate the terms of each loan.
You also can compare how much each company is willing to give you. Since the value of your car determines loan amounts, the amount offered by each company is not likely to vary too significantly. However, these quotes are generally free, and figuring how much each lender can offer will allow you to make a more informed decision about your loan.
In short, while the actual process of obtaining a title loan in Texas is fairly straightforward, it's important to fully understand the fine print of each loan before you sign. By considering repayment penalties, interest rates, and loan terms alongside the total loan amount of offered, you will be well equipped to get the best deal possible.
Auto Title Loan Laws in Texas
Texas is one of the friendliest states in the nation when it comes to car title loans. Texas lets car title loan lenders operate freely and provide people with damaged credit the resources they need to borrow money.
However, that also means predatory lenders abound as well. That's why it's a good idea to understand the laws surrounding car title loan lending in Texas.
Auto Title Loan Laws in Texas
Texas allows lenders to charge as much interest as they like. Some charge 200% APR (annual percentage rate) and others charge 850% APR! By Texas law, every lender has to display his interest fees and finance charges in a conspicuous place. He also has to explain these charges to you prior to you signing your loan documents. If you don't like the sound of their fees, don't sign the documents.
If you've already agreed to a loan with a lender who is charging you a high interest rate, try getting a title loan buyout with another lender. The new lender can buy the account at a discount and take it over. You'll pay lower interest rates, which means less money out of your pocket.