VEHICLE TITLE LOANS -- NOT ALL LENDERS ARE EQUAL
Your car is a valuable asset. Next to your house, it is probably one of your largest financial investments. And similarly, like your house, you can make the equity in your car work for you when you need to borrow money.
But not all lenders are equal. So what should you look in a lender for when you go to borrow money? Basically, the following five things:
1. Make sure your loan is open so you can pay off early. Why pay interest on repayment time not needed?
2. Be sure the lender reports to Equifax regularly so that your payments can help you rebuild your credit score. A solid repayment history on Equifax helps to restore your credibility as a person who can manage your payments responsibly over a prolonged period of time.
3. If you are unableto make a payment on time, will you be able to call and hold your payment? Will there be a charge? How long can you hold your payment? Lenders differ on this. But there are some such as Prudent Financial Services who will allow you to hold your payments free of charge for up to two weeks. This is rare.
4. Ask your lender if he will work with you in the event of an illness, a job loss or any other unforeseen misfortune that could impact on your ability to repay. Would the lender restructure the loan payments, for example?
5. If you default on a loan payment but call up quickly to make arrangements for repayment, ask for reassurance that there will not be repossession of the car. Most lenders will respond positively if you call promptly. Some will not.
The relationship between lender and borrower is one of mutual trust. The borrower is putting his car on the line and the lender is usually putting a good chunk of money at risk. For the relationship to work, both parties have to be responsible and respectful. If the borrower defaults on payments without communicating to the lender, he/she may jeopardize the possession of the car.
The onus is on the you, the borrower, to contact your lender as quickly as possible if there is a problem. Most responsible lenders will work with you as long as they feel you are being honest and open. This is how the borrower-lender process of Vehicle Title Loans could and should work.
For more financial tips visit www.prudentfinancial.net
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