When you have a car title loan in Phoenix, you have agreed to pay a portion of the total cost of an automobile. You are expected to pay a fraction of the balance on a monthly basis, along with the associated interest. If you want to calculate the interest rate for an entire year of payments, then you need to determine the value of two different figures.

First, you must determine the exact amount of each monthly payment that covers the interest charges. Once you know how much of each monthly payment goes towards such charges, you need to be clear about one other figure. You must have a dollar figure for your outstanding balance, the amount that you owe to the seller.

Both of the figures mentioned in the preceding paragraph are dollar amounts. The balance is probably much larger than the added, interest-related charges. Divide that smaller figure by the larger one. Then take the result of that calculation and multiply that result by 12.

Once you have completed that calculation, you should have a decimal figure. It is your annual interest rate expressed as a decimal. Unfortunately, you will find it difficult to make decisions, regarding your car title loan, if you intend to base that decision on a decimal figure. As a result, you need something that holds greater meaning.

You can obtain a more meaningful number by performing one further calculation. Simply multiply the decimal amount by 100. That gives you your annual interest rate, expressed as a percentage.  By expressing that figure as a percentage, you should have a much better idea of how great an impact that part of your payment plays in a determination of the vehicle’s total cost.

If you want to reduce that cost, you ought to look around for a way to reduce the interest-related charges. You may be able to do that by refinancing your loan. That is why it pays to learn about how you have been charged, after you agreed to take-on that same loan, and then got behind the wheel of your new vehicle.

If you find that you cannot refinance your Phoenix car title loan, you have three other options. You can stop making payments and wait for someone to repossess your vehicle. You can seek an added source of income, so that you can better handle the expected payments. Finally, you can sell your vehicle, so that you no longer have to pay for it.