Auto Title Loan Repayment Possibilities
Acquiring an auto title loan may appeal to those who are currently in need of extra money and unable to obtain funding through a finance company. A title loan may come with repayment terms that include the responsibility of paying an interest rate, service fees, and early repayment charges. Understanding the requirements will help you figure out what the total cost of your title loan repayment will be.
APR Versus Monthly Interest Fees
An APR (Annual Percentage Rate) is the total amount of interest that will be tacked onto your loan over the course of twelve months. An auto title loan that is listed with an APR will provide you with a cut and dry figure that you can add to the principal that you will be required to pay back.
A monthly interest rate may not seem too concerning at first. This rate, however, will be charged on a monthly basis. You will need to calculate how long you have to pay the loan back and multiply the interest rate by the number of months that your title loan will be active. Add the figure to the principal to determine how much it will cost you to pay back your loan.
Document fees, title fees, and processing fees could potentially be added to an auto title loan. Not all companies add extra charges though. When settling on an auto title loan provider, ask for a list of the fees that you will be charged. Service fees are typically charged one time. These fees may either be added to your first loan payment or may be divided among several months.
Early Repayment Charges
Paying your loan back early may seem like the responsible thing to do but may not eliminate interest and prepayment fees that you didn't anticipate being charged for. If an auto loan company penalizes those who make early payments, the additional fees will need to be paid prior to regaining ownership of a vehicle title. On the contrary, there may be some auto title loan providers who do not penalize early payers.
These types of businesses may promote discounts for those who are able to pay down their loans quicker than the time that is allotted. Find out what the minimum repayment and maximum repayment options are. Some loan companies may offer flexible terms and allow a client to decide whether they want to pay back their loan within a short timeframe or a longer one.
Contact a company near you for more information on auto title loans.