Title loan interest rates will vary depending on where you live as each state has different restrictions and caps on secured loans, but the annual percentage rate can range from 30% to 125%. Keep in mind the APR listed here reflects a percentage on an annual scale. It’s in your best interest to pay back title loans as quickly as possible to avoid monthly finance charges.
Other fees that you can expect with from title loans can include, but are not limited to, the title fee (a percentage of the loan amount), application fee (typically $30 – $100), administrative fees, processing fees, and late charges. In some cases, you may be assessed a renewal fee that ranges from 1.5% to 10%. As is the case with the APR, many states have restrictions and caps when it comes to late charges and other administrative fees.
Consider The Quoted Interest Rate Before Taking Out A Title Loan
Some states cap the interest rates you can face on a title loan, but if it is not an option in your state because there are no limits or they are higher than the state limits, then why use one? With that in mind, we recommend using title loans and other types of unsecured loans only when absolutely necessary and seeking out different forms of financial assistance like credit unions or short term installment lenders like. You should only consider online title loans if you have no other choice because title loans have some of the highest interest rates and finance charges. Be sure to check the lending disclosures for any finance company you work with.
What Percentage Of Borrowers Will Pay Back A Title Loan
We’re not surprised that over 70% of title loan applicants will ultimately pay back any money they borrowed. Borrowers who use loans like title loans typically don’t have a lot of other options. Plus, even if a borrower has bad credit, a car is still a valuable asset and usually worth more than the amount needed to be borrowed. Of course, there are some borrowers who can never afford to repay their title loan because they make less money or have higher monthly expenses but the vast majority of borrowers do eventually pay it back as expected.
Can I Make Extra or Early Payments To Avoid Excessive Finance Charges
Yes, you can always pay back your title loan early and that’s something that should always be recommended if you have the means to do so. Since title loans are meant to be short term, there is not usually an early repayment fee associated with them. Remember to ask your lender if they charge a prepayment penalty before you sign off on the title loan contract.