There are a lot of myths about Arizona title loans. If you’ve never taken out a title loan before, you might not know what to expect. This article will clear up some misunderstandings about Arizona title loans and give you a better idea of what to expect.
Myth #1: You have to give up your car. While there are some companies that require you to hand over your car, that is rare. It is most common when getting a title loan from a pawn shop. Most title loan companies understand that you need your car to get to work so you can earn the money to pay off the loan. Check with the company to find out if you can keep your car before you take out a loan. If not, look for another title loan company. There are plenty out there that will let you keep driving your car.
Myth #2: You can’t get a title loan if you have bad credit. Many people think you need to have good, or at least fair, credit for any type of loan. This is not the case with title loans. Since you are putting up the title to your vehicle as collateral, the lender knows they will be able to get their money back out of your car if you default. That is why they are willing to lend to people who have bad credit or no credit.
Myth #3: The interest will kill you. While it is true that car title loans often have a high APR, most people who take out this type of loan need it for a short period of time. If you repay the loan within 30 days, the interest won’t be that bad. It’s when you take a full year or even longer to pay back the loan that the interest will add up to a huge amount.
Myth #4: There are prepayment penalties. This may be true of some companies, but not all title loan companies charge prepayment penalties. They would rather see you pay off the loan early and get back to life as normal. Check with your title company to see if they have a prepayment penalty before you take out a loan.
Myth #5: All title loan companies are the same. As with anything else, you have to shop around. There can be differences in interest rates, prepayment penalties, and even whether you can drive the car while you have a title loan. Ask lots of questions and make sure you know the terms of the loan before you agree to it.
There is a reason Tio Rico is the leading title loan company in Arizona. We stand out from the competition by offering your first month free if you don’t have an existing title loan. And if you do have an existing title loan, we’ll pay you $100 to switch. Find out how to get cash fast with an Arizona auto title loan today.