Obviously, in the event that you are able to acquire a Atlanta title pawn loan based on your good credit score, then by all means, make the most of that opportunity. You will likely have lending companies competing for your organization and can negotiate lower rates because your credit history offers you bargaining power.
However, for anyone people with poor credit histories and no bargaining power, it's important to keep yourself informed of all credit possibilities to us. Most, lenders will need collateral. What this means is they'll ask us to put up something of value - that individuals own - as security for the loan. It's a measure they take to ensure they'll get their cash back one of the ways or another. Either they receive full payment for the loan, or they take our collateral.
So let's say you have something of value and that "something" is really a car. You have the title for that vehicle and in order to get some quick cash, you approach a title loan lender to acquire a loan, utilizing your title as collateral. Here's what you want to make sure to discover beforehand:
- Term of the Loan - Underneath line is, just how long have you got to cover off this loan? One type of title loan to be avoided is the Title Pawn loan. A Title Pawn is usually a 30 day loan with a balloon payment at the end. Meaning you have 30 days before the full amount of the loan, including interest, is due. This is almost impossible to cover back and can result in increased debt. So steer clear of this sort of title loan!
- Prepayment Penalty - Let's face it, loan companies want your interest payments. That's how they make money. To make sure they make a profit away from your loan, they discourage early repayment by charging you a penalty for paying your loan off early. So before you sign the loan, make sure to ask your loan officer if you have a prepayment penalty.
- How Interest is Accrued - Most loan companies calculate loans so that the initial payments are applied primarily to interest, with a tiny portion of the payments going toward principal. The closer a borrower gets to the finish of the definition of of their loan, the more their payment is placed on principal rather than interest. This can be a common practice among moneylenders, and never exclusive to title loan lenders. However, you can find varying means of determining interest. As an example, is the interest amount determined by the residual balance of the loan, or could it be determined by the total amount of the loan and then divided up in to the monthly payment? A loan that only charges interest on the residual balance of the loan can save you money in the long run. Because everytime you produce a payment toward principal, the total amount of your loan decreases, therefore lowering the total amount of interest due on that loan.
Unfortunately, most people who have bad credit wind up paying more for his or her loans than people who have good credit. But utilizing these tips can keep borrowers from paying significantly more than necessary.