Do you need to get a certain amount of money fast, but you don’t know where to ask for it? Well, if the sum of money you need is not a significant amount, you can get a title loan. A title loan is a short-termed loan that is usually approved in less than half an hour. So, you need to make sure that you will be able to repay the sum you borrowed in the designated time, which is in most cases is 30 days. Are there any risks associated with this type of loan? Well, yes, there are, because the requirements for a title loan means you need to secure the money you borrowed by offering one of your assets, in this case, the title of your car. You see, if you want the lender to give you the money you need fast and easy, you need to give something in return, so that the lender secures that money in case you are unable to pay it back.
How a Title Loan Works in Arizona
To better understand how title loans work in Phoenix, AZ and to be aware of the risks, let us get into more details. First, you should know that the amount of money you will get with a title loan in Arizona depends on the value of your car. Because you will offer your vehicle as collateral, the lender will be able to give you an exact sum after the evaluation of your vehicle. Still, it would be highly recommended to take only as much as you need, so that you will be able to pay the loan back. If you don’t, then there is the high risk of losing your car to the lender.
Research Title Loan Lenders
Before you choose the right lender in your case, you should do some research. You should take a look at the conditions of a title loan as offered by multiple lenders so that you can make a well-informed decision in the end. Check the requirements of getting such a loan, the terms of payment, the interest rates, and what loan will be offered for your car. You see, some lenders will provide a loan that will have to be paid in 30 days, while others will give you six months to make the payment, so it depends a lot from one lender to another. Also, the amount of money you can get can vary between $100 and $50,000, again, depending on the current state and value of your car.
Arizona Title Loan Requirements
Once you found the right lender in your case, you need to bring in the necessary documents and fulfill all requirements for a title loan in Phoenix. Having your car’s title might be enough if you don’t need a large loan. Still, the lender may ask you to have proof of car insurance as well, which is another measure of precaution in case you won’t be able to pay the loan. Also, the car title must have your name on it. Otherwise, it won’t be accepted. In other words, you need to be the owner of the car if you want to get a title loan. You can still apply for this kind of loan even if you are not the owner of the car, as long as the owner will be present to accept and sign the papers and in case the owner does not have any other liens on his or her name. There are parts in Arizona where the lender may request for the car’s spare key, but it is worth knowing that such a practice is illegal in some areas, such as in Phoenix. As advice for when you are bringing in the car for evaluation, make sure it looks its best so that you will get a fair amount of money on it.
If you concluded that the title loan is the right way to go in your case and you also find a suitable lender, you would have to head down with the car to the title loan company you chose. A clerk representing the lender will carefully inspect your vehicle and will offer you a sum of money in its exchange. If you agree, you will have to fill in the requested paperwork. Just have in mind that the clerk will offer you the maximum amount that can be provided in the case of your car, although you are not obliged to borrow the whole sum. You are free to take as much as you need, the smaller the loan, the better and safer it is. You can even ask the clerk of the loan company to offer you a loan that represents the sum you can afford to pay back within the requested time frame. Thus, you minimize the risks of losing your car.
Make Your Payments
Once the loan is approved, you’ll need to make sure that you will pay the money you own at the end of the agreed period. For example, if you got a 30-day loan, you will make installment payments on your payday and pay off the loan on the 30th day. If you got a 6-month loan, you would make payments on each of your paydays, and after the six months passed; your loan will be paid off. Keep in mind that until you can make the final payment on the loan, the lender will hold onto your car’s title. Thus, this means that during this period you are no longer the owner of the car. So, if you’re wondering how auto title loans work, you will get your car’s title back once you make the necessary payment.
In case you cannot make the payment, you can ask the lender to give you more time, like an additional month. But, you will have to pay the additional interest rate for this extra time as well, which will only add more money to your payment. Lenders are not too generous when it comes to offering more time, so you don’t get too many chances in this direction, and you will eventually have to pay up. If you don’t, according to the contract you signed, the lender has the right to get a hold of your car and sell it, to recover the money you burrowed but weren’t able to pay back.