How to Know If You Can Afford an Auto Title Loan
The concept of the auto title loan is growing in popularity as more and more people look for ways to get some quick cash when they need it. Auto title loans offer benefits to people who may have trouble getting a loan in the conventional way, or who don't want to wait to get the process going.
However, as with any loan it is important that you figure out whether you can really afford it before you proceed.
Qualifications
Getting an auto title loan is quite a bit easier than a regular personal loan, but you still have to meet certain requirements. Here's a list of the common qualifications you must have in order to get an auto title loan.
1. You must own your vehicle outright. 2. Your vehicle must be insured and in your name only. 3. Your vehicle can't be more than six years old. This number may vary depending on the lender. 4. Your vehicle must have current plates that are up to date.
Do the Math
The primary way for you to decide if you can afford a car title loan is to do the math ahead of time. Sometimes, the repayment schedule is short and sweet, but there are times when it may stretch out, which will result in higher interest payments for you.
If you don't already have one, work out a budget and then include the auto title loan payment along with your normal monthly expenses. Figure out how much you bring in each month in income, then subtract the new total for your expenses. If you still have money left over after the new payment, then you should be good to go.
Make sure that you leave a little breathing room in case of unexpected expenses. It's never a good idea to budget right down to the penny, and that's even more true when your car is on the line. Keep in mind that you have secured your vehicle against the amount of the loan and if you default, your car may be taken from you.
Auto title loans don't require great credit, a good income or any of the other standard qualifications of a typical personal loan. That's why it's important to make sure you can afford it before you take advantage of it. Usually the lender will tell you if you can afford a loan or not, but with a car title loan, that responsibility is yours.
About the Author
Robert Pearson, an avid blogger and writer specializing in money management. For auto tile loans in the Greater Toronto Area, he recommends https://www.borrowwithyourcar.com/
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