Title loans don’t have the best of reputations. You’ve probably run into countless jokes and memes about title lenders and how borrowing from one near guarantees you parting ways with your car at the end. This horrid reputation is, to say the least, actually an exaggeration.
In reality, one study found that less than 10 percent of the cars involved in title loans are repossessed. The same study concluded that 85 percent of borrowers had access to other means of going to work (such as subway, bus, taxi, car rental, cycling and walking) just in case the car was repossessed, meaning they wouldn’t be completely grounded.
So if you ever find yourself at a point where you are running out of cash that you desperately need for some pressing need, don’t shun title loans in their entirety. The overwhelming majority of people who take up the loans do repay. But to ensure you have a pleasant experience, it’s important that you choose your lender wisely. Title lenders aren’t created equal. Before you sign the dotted line, you need to evaluate the lender in the following ways.
1. Reviews and Testimonials
It’s unnecessary to learn from your own unpleasant experience if someone else has already endured the same before you. The title lender you are interested in has likely served hundreds or thousands of customers before. What do these past and present customers have to say about the lender? Many lenders will have testimonials on their site, but you cannot go with these alone, as there’s hardly any business that will allow a damning testimonial on their web pages.
You are better off looking at the reviews on third-party platforms like Google Reviews and Facebook Reviews, where the title lender doesn’t have as much leeway over the direction of the conversation. Note that irrespective of how professional, credible and trustworthy a lender is, there will be some negative reviews. What you should look out for is the overall sentiment. What’s the average rating? Are the majority of reviews positive, negative or neutral?
2. Interest Rates and Fees
This is arguably the one thing that makes title lenders controversial. Nevertheless, given the reasons people turn to title loans, it shouldn’t be surprising that the interest rates can be pretty steep with fees aplenty. However, you want to work with a transparent lender. The last thing you need is to find out weeks or months after committing to the title loan contract that the interest and fees are higher than you thought or can afford.
Usually, title lenders who try to conceal this information will hide it in plain sight—specifically, in the terms and conditions (T&Cs). After all, the lenders do not operate outside the law and therefore have to make sure they aren’t openly deceiving their customers. Ergo, read through the T&Cs carefully and feel free to ask questions on any clause that isn’t clear to you. The good thing about hidden fees and rates is that the past customers will have already experienced this disingenuity, so you can expect to see these in independent reviews and testimonials.
3. Experience and Reputation
Taking a loan can have long term repercussions, not just on how much disposable income you are left with but also, if things go awry, your credit score. While you’d expect any problems you run into with a title loan will revolve around your ability to repay, the lender’s experience and reputation can also have an enormous impact on the quality of your interaction.
It doesn’t mean that an older lender is automatically better than a newer one. Still, an established lender has likely developed internal procedures, controls and systems that streamline the process and make it more customer-friendly. An established lender will also be less willing to soil a stellar reputation that’s taken them years to build.
4. Excellent Customer Support
Signing the title loan contract and receiving the disbursement in your account only marks the formal start of your interaction with the lender. Over the course of the contract’s duration, you’ll likely have to reach out to the lender on a number of issues. That means talking to customer support.
If the lender’s customer support is woeful, you are going to dread any situation that forces you to get in touch with them. Great customer support is knowledgeable, helpful, resourceful, problem-solving, enthusiastic and, above all, available.
5. Turn Around Times
By the time you turn to a title lender, the chances are that you need the money urgently. You, therefore, want a lender who has speedy turnaround times and sticks to their promised deadlines. If they commit to approving and disbursing the loan within 24 hours of you submitting all the needed paperwork, that has to happen.
The more predictable the lender is time-wise, the easier it will be for you to plan around receipt of the cash.
Loans with a dodgy title lender can transform into ghosts that refuse to die no matter what you do. By evaluating title lenders against these parameters, you are more likely to land on a lender that will deliver to your satisfaction.