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Taking out a Title Loan? Factors You Should Consider When Selecting a Title Loan Company

The holiday season can be expensive. Between trying to buy presents, ingredients for baking, and the items for a holiday feast, it is easy to spend more than you make. If you are running short on money this holiday season, you may be looking into taking out a title loan. 

Before you take out a title loan, it is important to understand that not every company is the same. Taking the time to learn about different companies can help you find the one that is the best fit for your needs. Here are a few of the factors you should consider when you are selecting a title loan company. 

The Interest Rate

In the state of Georgia, a title loan company is legally allowed to charge you up to 25 percent interest for the first 90 days of a title loan and 12.5 percent interest after 90 days. It is important to note that this is monthly interest. A 25 percent monthly rate is equal to 300 percent yearly, and 12.5 is equal to 150 percent annually. 

While a title loan company can legally charge you anywhere from 12.5 to 25 percent, depending on the number of days your loan is out for, not every title loan company charges the maximum amount allowed. Take your time to contact various title loan companies to find out which ones charge the lowest interest rates in your area. 

The Minimum and Maximum Loan Amount

Another important factor to compare when you are looking for a title loan company is the minimum and maximum amount of the loan you can obtain for your automobile. In the state of Georgia, there is no minimum or maximum amount that a title loan company has to lend. 

Most companies have their own rules for the minimum and maximum title loan amounts that they will lend. Calling different companies will help you find a company that lends the amount you need. 

Your Monthly Payment Amount

As you look to take out a title loan, always take the time to ask what your monthly payment amount will be from one company to the next. The amount of your loan and your interest rate will affect your monthly payment amount. In addition to these factors, some companies offer different monthly payment plans. 

One company may want even and steady payments that work to pay down both your interest and the principal. Other companies may offer interest-only loans. They may allow you to pay interest on the loan and then require you to pay the principal amount in full by a certain due date. Always find out how the monthly payment amounts work, and ensure that you can afford to make the payments. 

Default Arrangements

Lastly, take the time to ask a title loan company what default arrangements they can make just in case you default on your loan. When taking out a title loan, it is important to ensure you can afford the payments. But life happens, and you may find yourself without enough money one month. The last thing you want to do is find out that a title loan company offers no default arrangements and lose your car. 

Many title loan companies have plans in place that can help those who are struggling to pay their title loans. This may include refinancing the loan or reducing the payments and extending the life of the loan. Always ask up front what will happen if you default so you can find a company that will work with you in the unlikely event that you find yourself in this scenario. 

Here at Title Exchange, we are committed to helping Georgia residents quickly get the cash you need in exchange for your car's title. We offer fair interest rates and affordable payments, and we will work with you to avoid any defaults. Contact us today to learn more about us and how we can help you get through the holidays with the cash you need.