Most of us have been in the position where we need cash to tide us over until the next paycheck. If you don’t have a friend or family member available to provide you with a loan, you have another option: an auto title loan. In most cases, all you need is a clean car title, although, for larger loans, you may also need to show proof of full coverage car insurance.
The best part is that you don’t need to have a good credit rating. This is because instead of your credit history serving as proof that you will pay back the money, your car’s value is. For many with no credit history or a bad credit record, an auto title loan is one of the very few options available for getting money quickly.
Just how fast? Typically, you can complete the process of applying and being approved for a car title loan in 30 minutes or less. Here’s a step-by-step guide for how to get a title loan.
Step 1: Call Arizona auto title loan companies.
You should compare the requirements, payment terms, interest rates, and the loan value they will give to your car to see which best meets your needs. You will find that payment terms for 6 month loans vary from weekly, bi-weekly, and monthly, and you can get loans as low as $100 and as high as $50,000. Interest rates vary as well, but must fall within Arizona law.
Step 2: Find the necessary documents.
For smaller loans, this usually just means the car title, but you may also need to show proof of car insurance. The car’s title must have your name as the current owner (otherwise the owner has to be present to get the loan), and it must be free of liens. In some cases, you may be asked for a spare key, but this is illegal in some areas (such as Phoenix). You may also want to get your car in more presentable shape in order to show how much it is worth.
Step 3: Bring your car and the documents to the company.
Once at the auto title loan company, you will be asked to fill out an application. Then a clerk will inspect your car and offer you a loan amount. Typically, you will be offered the maximum amount that your car qualifies for, but you can always request a smaller loan if you don’t need the full amount. Some people find it helpful to figure out the payment amount they can afford for the loan, and then ask the clerk to base the amount of the loan on this number.
This monthly payment amount will cover only the interest owed on the loan. At the end of the six months, you will have to pay the principle all at once. This is often included in your last payment, and you always have the right to request that a payment schedule (including the amounts that you owe on each date) is provided to you in writing to ensure that you’re not confused about what’s owed when.
Step 4: Read over the terms of the loan.
This is the most important step. You want to ensure that you understand everything you are agreeing to and that you can meet these requirements. By law, the terms of the loan must be clear, so that means if you have questions, speak up! If the representative of the car title loan company is unwilling to answer, then it’s best that you take your business elsewhere. A reputable company will take the time to answer any questions you have.
Once you have completed all the required paperwork, the clerk will provide you with a check for the loan amount!
Step 5: Make the required payments.
Refer to that payment schedule and make your loan payments on or before the due dates. If you do not, you may incur additional late fees or more interest charges – and you also risk losing your car.
If you will miss or be late with a payment, it’s in your best interest to contact the auto title loan company as soon as possible to see if you can work out a favorable arrangement. Many companies are willing to work with you as long as you communicate and don’t make a habit of it.