Most collateral loans have the risk of repossession irrespective of whether it is your house or vehicle that has been put as collateral. But this only happens when you default on payment and do not pay the interest and the loan amount, the collateral is repossessed. The popular aspect of getting a car title loan is that it is quickly approved as there are no credit history checks and only your car’s current value and your repaying capacity is assessed.
But don’t let it discourage you from thinking about taking an Phoenix auto title loan. You can take out an Phoenix car title loan and still avoid repossession by acting smart and doing your math. By doing that not only will you be able to take a loan but be able to keep your car. Here are some interesting tips to help you take the car title loan and yet keep away repossession. But have you wondered how many people actually end up losing their vehicles? According to related statistics, only about 5% to 8% people have lenders repossess their Phoenix cars so that translates as 90% of the car title loans are safely paid.
Due to the hype of predatory sales practices of lenders, most people are worried when they take a car title loan but isn’t it easier to put your car as collateral than your house?
The best way to avoid repossession of your car is by:
BBB accredited company: Always work with a BBB accredited Phoenix lender that has legal sanctions and you deal with a company that has reasonable interest rates and policies on the loan. Start with researching the lenders online, talk with them and check them at BBB.org to ensure you are not being scammed by unscrupulous lenders.
Borrow as per need: You need to make sure that even though you maybe qualifying for a higher amount so just take the loan for the amount that you need. Taking money only for the emergency purpose is understandable but taking more than you need is putting yourself in debt quickly.
Repay on schedule: That is the most important step that you need to practice to make sure your car is not repossessed. Late payments or defaults on payments can run a high bill as high interest is charged when you don’t pay on time or extend the loan. The easy way out is to keep paying the minimum amount due to ensure you don’t lose your car.
It is best to pay off the loan as scheduled as the lenders have high interest that keeps on adding making it impossible to repay. Think it through and check your budget whether you can take the auto title loan or not.