What You Should Know About Auto Title Loans in AZ
Loan contracts come in many different variations, each of which will have its own unique terms that can range from relatively simple verbal agreements to more complex contracts. A lending institution will lend money to people for items such as a home, car or college tuition, and some will even grant payday advances or personal loans if you’re looking to purchase a non-essential item. Therefore, if you’re in need of a loan to help make your life more manageable, or if you’re looking to purchase a big-ticket item like a car, it’s important to know exactly how loans work.
Here’s some information you should know about auto title loans in AZ.
Auto title loans
An auto title loan is a unique type of loan that has some extra stipulations you wouldn’t find in a standard bank loan. With such a loan, lenders will issue the loan for a certain amount of money over a relatively short time period.
Borrowers usually seek an auto title loan if they give the title of their vehicle to the lender as collateral. This can be any type of vehicle—car, truck, motorcycle, etc. You as the borrower agree to pay a fee, and the lender will give you 30 days to pay back the title loan.
If you are going to borrow against your vehicle, though, you must have some equity in your car. You either need to have paid off the loans you took out to purchase the vehicle in the first place, or at least have a good amount of equity already built up in the loan if you’re still paying it off.
Auto title loans can range anywhere from $100 to $5,500, and the amount you’re able to borrow depends on how much equity you have in the vehicle. The greater the value, the more you’re able to borrow, but you’ll likely not be able to get anything approaching the full value of the car in a title loan. After all, lenders want to be able to get their money back quickly and easily, and as such will only lend what they can get back as efficiently as possible. You can expect to get between 25 and 50 percent of your vehicle’s value in an auto title loan.
Paying back the loan
Auto title loans are short-term loans, meaning you’ll typically be required to pay them back within 15 to 30 days. Therefore, they’re only a reasonable loan option if you know you have cash coming your way and will be able to make the payment within a month or less.
In some circumstances, you’re able to extend repayment by rolling the loan over into a new 30-day loan. However, this becomes extremely expensive rather quickly, as those new loans also come with new loan fees. It might not also be an option in every case, depending on the limitations in your area.
For more information about auto title loans in AZ and how they work, contact the team at Cash-N-Go Auto Title Loans of Phoenix today.