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Car Title Loans Washington State

Car Title Loans Washington State – When money is tight and you’re faced with an emergency, it can be tempting to accept any financial discount.

But if you’re considering a title loan, it’s important to know what it is and isn’t, and understand the risks of this risky loan option. The information below will help you make an informed decision.

Car Title Loans Washington State

Car Title Loans Washington State

A title loan is a short-term, high-interest loan, usually for a small amount ($500 to $1,000). Also known as a pink line loan, fast car loan or title mortgage, they usually have high APRs – often over 300%, and are difficult to repay.

Payday Loans & Title Loans

For example, if you want to borrow $500, you’ll pay an average of $125 on top of the title loan amount for a total of $625 plus fees.

Also, you are giving the vehicle title to the loan, making it a very risky and expensive type of loan.

By definition, title loans require lenders to hold the vehicle’s title as collateral for repayment. A financial agreement is a guarantee for this. You may already be familiar with this financial term, as secured personal loans also use collateral. However, secured loans from reputable lenders offering 2 to 5 years of repayment and APR limits not exceeding 35.99% offer much better terms if you qualify.

Why are title loans the wrong choice? This is because, like payday loans, title loans are a form of predatory lending.

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These types of loans are often characterized by unclear terms and are aimed at people with low incomes and bad credit.

Beware of predatory title lenders. Predatory lenders convince borrowers to take out loans with unfair terms, including high fees, high interest rates, and short repayment periods.

In exchange for a title loan, you give the lender the title to a car, truck or motorcycle. Lenders usually require borrowers to own their car outright, but some will still fund it if you’ve paid off most of the car loan.

Car Title Loans Washington State

The payment period is short, usually 15-30 days. If you fail to pay your loan on time, you risk not only paying high fees, but also losing your car.

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With APRs typically in the 300% range, title loans can be expensive and can lead to a cycle of debt that leaves you worse off than you were in the first place. According to Pew Charitable Trusts, borrowers pay an average of $1,200 in fees for just a $1,000 title loan.

Your car will not be titled back until you pay off the loan and pay all associated fees. If you fail to pay it back, the lender will not only keep your name, but also take your car.

A title loan is usually for a relatively small amount, often 25% to 50% of the vehicle’s value. For example, if your car is worth $4,000, your home equity loan will start at about $1,000.

Most legal loans are paid within 30 days, but some can be paid within 15 days. Although rare, some title loans require borrowers to make payments in three to six monthly installments.

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These loan terms are very different from trusted lenders like OneMain Financial, which typically give customers two to five years to repay the loan.

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The main disadvantage of a title loan is cost. Like all predatory lending methods, they are expensive, consuming 50% of the average borrower’s gross monthly income.

Another big downside to their incredibly short term is the risk of losing your car if you can’t repay the loan in full.

Car Title Loans Washington State

Due to the high cost, car loans are very difficult to repay. This often results in a loan cycle where borrowers “roll over” the loan each month.

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For example, if the loan financing fee is 25%, you would pay $250 to get $1,000. If you cannot pay off the loan in full after 30 days, you will “roll over” the loan. Pay an extra $250 next month. In just two months, your total fees are now $500 – 50% of the total loan amount.

A title loan is a risky and high-cost lending practice that is rarely a good idea. Even if your finances are tight, there may be other potential options.

Secured loans from trusted lenders offer reasonable APRs, monthly payments you can afford, and a realistic timeline for repaying your loan. If you are in financial trouble, they are usually willing to work with you on repayment terms.

Whatever you decide, weigh your choices carefully. Otherwise, you could end up in debt without a car to boot.

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1. https://www.creditkarma.com/personal-loans/i/how-do-title-loans-work 2. https://www.consumer.ftc.gov/articles/what-know-about-payday -and-car-title-loans 3. https://www.consumeradvocates.org/for-consumers/predatory-lending 4. https://www.nerdwallet.com/article/loans/personal-loans/what-is -predatory-lending 5. https://www.pewtrusts.org/~/media/assets/2015/03/autotitleloansreport.pdf This article was updated from its original publication on November 19, 2020. Contributed by Melina Duffett.

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Car Title Loans Washington State

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Learn what a title loan is and how title loans work. How is a title loan different from other loans?

Title loans can also be called car title loan, secured loan or secured loan. They are usually loan products with small loan amounts and short repayment periods. A special feature of this loan is that the name of the vehicle is used as the loan collateral.

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Loan collateral is anything used to back up a loan product or secure a loan. It is insurance that helps reduce the risks that lenders take when allowing customers to borrow money.

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In this case, the loan collateral is the title to your vehicle, often the value of a car and that personal asset.

As with any financial product, there are certain things you need to do to meet your additional requirements and secure the funds you need. Some of the things you need to qualify for this type of loan include:

These are some of the basics you may need to secure a title loan. But depending on the lender you choose, there may be other things you need to bring or prepare.

Car Title Loans Washington State

Always double check with your lender by visiting their website or calling a store location to make sure you have everything you need to complete your application.

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The lender needs to make sure all the vehicle documents are correct, conduct a quick inspection of the vehicle to assess its value, make sure you are the owner and make sure there are no other liens on the title. They call it “the obvious subject”.

A clear title is a vehicle title with no other liens or other loans attached to the vehicle. This means that you are not currently using the vehicle for other title loans and that you own the vehicle.

Lenders rarely like to allow borrowers to take out multiple loans on the same vehicle. The more collateral you have on your vehicle, the riskier your loans are. This is why lenders require you to clear your car title of any other liens before taking out a car title loan.

Common forms of personal identification for loans include a passport, driver’s license, or some other form of official, government-issued identification.

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This gives lenders basic information about your identity so they can get to know you and contact you. This helps them verify who you are and match your identification with the vehicle owner.

In addition to your form of personal identification, you may be required to provide some basic personal contact information. This may include your phone number, address and email.

Many lenders require consumers to provide proof of income or employment in order to obtain a loan. This helps the lender to know if the customer can repay the loan.

Car Title Loans Washington State

Responsible lenders do not want to set their clients up for failure. On the contrary, they want themselves

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