Deciding on Title Loan terms
An auto title loan is an excellent way in which to get the money you need as quickly and conveniently as possible. There are many ways to apply, and if you qualify you can get the money you need in as little as one business day.
Before you decide to apply, however, you should think about what you want as far as loan terms. Loan terms include the dollar amount of your monthly payments and how long you have to pay back the loan. These terms are customizable for qualified customers, so it would help to have some idea of what you’d like to do before you get to that part of the process.
You’re getting an auto title loan because of a financial need. There might even be some issues with your credit or a lack of funds in general. It is best to take these things into consideration before deciding on what you can afford to pay each month. Grab a piece of paper and notebook and do a quick budget calculation. First, write up your monthly income. Then estimate the following:
- Car/Life/Property Insurance
- Car Payment(s)
And don’t forget to include “entertainment” costs in there, if you can afford it.
Now, add that list together and subtract it from your monthly income. That should give you a rough estimate of how much money you’ll have left over. Looking at that number, how much can you afford to pay each month on your auto title loan?
Now you have to consider how long you’ll need to pay back the loan. Questions you’ll need to ask yourself include:
- Can I afford larger payments for a shorter loan term?
- Do I need to make smaller payments instead over a longer term?
- After I take care of my financial emergency, can I afford to pay back the loan early?
Remember that the longer it takes you to pay back a loan means the more you’ll pay in interest. Sure, those smaller payments might help you now, but will you actually lose money in the long run? For some people, it might be beneficial to set up a term that includes smaller payments for a longer period until their financial situation is stabilized. Then they can begin making larger payments to pay back the loan ahead of schedule and not spend as much in interest.
Whatever you decide, it’s important that you do not create a further financial burden for yourself and your family.
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