If you are in need of a car title loan, it is very easy to rush the process and apply with car title loan Euless lenders before you even research the terms and conditions of the contract. While the title loan industry is regulated and governed by state entities, what you might not know is that the state laws that a lender must comply with are based on the state where the lender is registered.
Some lenders get away with registering in a state where the laws are lenient and favorable to the lender, and knowing what you should research to avoid these lenders is critical. Here are the factors you should consider when applying for a car title loan in Texas so that you get the cash you need without digging yourself in an expensive contract that you will never be able to repay.
What is the Legal APR?
By law, a company must advertise their interest rate, but not all states require lenders to list the APR. APR stands for Annual Percentage Rate, and this is the percentage of interest you will pay of the principal over 12 months.
- Some companies charge APR interest rates as high as 300%, but others keep their APRs very low. If you want a competitive APR, VIP Finance of Texas charges 6% APR without even checking a borrower’s credit report.
Is it a Simple Interest or Compound Interest Loan?
How your payment is applied to the principal of the loan can significantly affect how much you will pay for your title loan over time. When you apply for a compound interest title loan, most of your initial payments are applied towards interest and not principal. This is called “front-lining” interest. While these contracts are favorable for the lender, they can extend how long it takes for a borrower to repay a loan.
Simple interest contracts are ideal for borrowers because a fixed amount goes towards principal and interest every time the borrower makes a payment. When you apply for a loan with VIP Finance, you have peace of mind in knowing your payment will lower your loan balance each and every month.
Are you Responsible If Your Car is Totaled or Inoperable?
One of the primary reasons you want to apply for a title loan is because you want to keep your car while you pay back the lender. If your car breaks down or is involved in an accident, you may be forced to purchase a new car. You should ask the lender if you will be responsible for repaying the loan if this happens.
Unlike other lenders, VIP Finance will offer you a membership to the Auto Club, so that you can walk away from your loan if this happens.
VIP Finance of Texas offers the lowest total payback in the industry and is the most popular locally owned car title loan lenders in the state.
The company operates off of Texas state laws and sets policies that keep the interests of the borrower in mind.