Commercial car title loans help people get quick cash to pay bills or deal with a financial emergency. However, car title loans have high interest rates and involve a risk of losing your vehicle.

5 Facts That You Must Know About Commercial Car Title Loans

Fact#1. You should own a vehicle

To get a title loan, you need to own a vehicle free and clear, or at least have some equity in that vehicle. The lender will return your title once the loan is paid off.

Fact#2. You should be prepared to pay a high interest fee

The lenders charge nearly 1/4th of the loan amount per month as their interest. For example, if you get a $2,000 loan for a 30-day period, then you’d pay $2,500 to settle your loan by the end of the month.

Fact#3. You should avoid defaulting

Car title loans are intended for short-term use. Many customers can’t pay their loan so soon, resulting in refinancing the loan just to avoid defaulting and losing their vehicle.

Fact#4. You can lose your vehicle

If you are unable to repay within the loan term, the lender will take away your vehicle. You will have to pay even more to get your vehicle back plus the due amount.

Fact#5. You should look for alternatives

Consider less risky alternatives such as payday alternative loans, personal loans or credit card advance that offer the best possible interest fee. Borrow only what you can pay back.

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