If you want to take out title loans online or at brick-and-mortar locations, you can find several sources for the funding. Most title loan companies or check cashing stores offer title loan funding as well as banks and credit unions. When you agree to this type of financing, you need to make sure that you understand the terms of the contract. The following information will help you understand your rights as a consumer when applying for and repaying for title loans.
The Lender Must Share the Terms of The Loan in Writing Before You Sign
You should understand the terms and conditions of the loan before you sign the paperwork. It is up to the lender to ensure that this happens. The lender should share the cost of the loan, including the interest rate you will be paying. They should also show you how long you will have for repaying any title loans that you take out and finance.
Check Out Any Add-Ons in The Loan Paperwork
Check out any add-ons that could increase the amount you have to pay for your title loan. Some add-ons may be included in the interest or finance charge, which increases the costs. For example, a roadside service plan might be considered an add-on. Make sure that you know what the cost covers in advance.
Find Out the Conditions for Repayment
You can repay a title loan online, in person at the lender, or through automatic repayments. If you choose an automatic repayment, the lender obtains regular and recurring payments from your debit card or bank. You cannot repay automatically unless you authorize the lender to do so. Therefore, you must agree in advance to have your payments automatically deducted.
The lender needs to give you a copy of your authorization for automatic repayment. The lender cannot require that you choose this payment option. Again, you can also pay in person or pay online yourself.
Learn More About Rolling Over the Amount
If you are unable to pay off the entire loan amount in 30 days (the usual time for repayment), the lender may be able to roll over the loan amount into a new title loan. When rolling over the amount, the lender adds interest and fees to the borrowed amount. For example, if you take out a loan of $300 but can only pay $100, the lender may roll over the remaining amount plus fees into a new loan amount.
Contact Your Lender Immediately If You Know That You Cannot Pay the Full Amount
Don’t waste any time contacting the lender if you know that you cannot pay the full loan amount on the designated date. Doing so will give you more time. Work out a feasible plan. If you are making the request in good faith, you should not experience any problems.
Once you find out that you cannot make repayment on the specified date, contact the lender by phone and not by email. Tell them the reason for the delay so you can schedule total repayment on a certain date. By taking this stance, you can fully enjoy the benefits of taking out this type of loan for emergencies and similar financial needs.