If you have a poor credit score, you know you are not eligible to receive any loan from banks or other traditional financial institutes you’ll need to turn to secure loans where they will keep your house or car as collateral and it is always better to put your car as collateral, in case it is repossessed. Taking out a Phoenix auto title loan from Auto Title Loans USA is the best way to have some cash quickly with the least income credit checks. But the downside is that you may get into more debt and your car can be repossessed due to non-payment of interest or monthly payments.
Just like a pawn shop where your valuable items are assessed for value, an auto title loan lender does the same for your car. In addition, the pink slip on your car needs to be signed over in their name and they need your payroll stub as verification that you can pay back the loan. Your minimum age requirement, proof of your residence and salary is essential before you can avail the vehicle title loan.
The Phoenix vehicle title loan company keeps your title deed until you clear the complete loan. Though you have 30 days to pay off the first installment on the loan, if you need to extend the loan, you need to pay a high rate of interest. However, it is important to check when you are taking Phoenix car title loan whether you are committing to it legally or are there discrepancies. Read the fine print within your contract and check if the contract clearly mentions:
- The method by which the interest rate is calculated and the time period over which it will be charged. See if the interest rate is on a monthly basis or yearly. The auto title loan are given by lenders that are not covered by usury laws and so the interest rate is very high.
- Check the penalties that are levied when you are unable to pay the installment or penalties which are levied on a late payment. Will the late payment lead to increased interest rates or additional fees levied?
Basically, if you do not pay back the loan that you have taken within a specific frame of time with all of the interest that is due, you have basically sold the car to the lender as either you need to have the total amount of money that is due to him or the lender will sell off the car to recover the amount.