The popularity of vehicle title loans in Phoenix stems from the fact that you can access it with minimal requirements. This is because you have to put as collateral your car whose value is above the loan you seek. In the case of a car title loan, most lenders offer title loans equal to a car’s 25% to 50% value.
Accessing a title loan is one of the easiest ways to acquire emergency funds. The title loan is usually a short-term loan whose payment period does not exceed twelve months in most cases. Ideally, a good auto title loan should have a maximum payment period of between three and six months maximum. As the name suggests, this type of loan is offered against a title, which can be a car although the security that you pledge remains in your name, your lender retains right of ownership and sale just in case you fail to pay loan advanced.
As the car title is surrendered in exchange of a vehicle title loan, lenders do not usually require you to have a good credit score. What you are do required is having is a car title in your own name and proof of regular income and you easily access a loan. The fact that you only access this type of loan when you are in distress financially presents the risk of securing predatory loans that are otherwise expensive to service.
A Phoenix car title loan is like any other loan when looked at in terms of its effect on your credit score. The fact that you can easily access Phoenix car title loan with bad credit means that you can use to improve on your credit score. But it calls for discipline on your part as failure to manage a title loan well can damage your credit score further. As part of discipline, you need to ensure that you pay your monthly dues as scheduled in your loan payment schedule. You can actually improve your credit score faster if you opt to clear your title loan in a short period rather than the scheduled period.
Being disciplined in the way you pay your Phoenix vehicle title loan is not limited to paying your monthly dues as required. The discipline should actually start earlier when applying for a title loan. It starts with carefully choosing a lender whose auto title loan terms you can comfortably comply with. Taking out an auto title loan without paying attention to a lender’s terms can leave you with a heavy financial burden that you may not be able to settle for a very long time, which has a negative effect on your credit score. Your choice of reliable lender should not be limited to comparing different lenders online. You need to contact close friends and family members who may have taken out a Phoenix vehicle title loan for advice. You may also make use of your local Better Business Bureau for information relating to a lender you have identified.