Signing up for auto title or registration loans is a big financial decision, so take some time out of your busy day to learn about some of the strategies for success and educating yourself on some common mistakes when dealing with loans.
To begin, these loans are both very similar with just one key difference. They are both secured loans, which means you receive cash today and agree to repay the money back over time, with interest, and you put forward collateral, your automobile, to ensure the lender makes their money back. The difference being, while an auto title loan uses the title of your car as collateral, a registration loan only asks that the vehicle is registered to you.
In terms of preparing and budgeting, the loans are identical. You should just be aware that the lender doesn’t have the same security that the title of your car holds. For example, you can will still be making payments on your car while signing for a registration loan. This is potentially a risky play, and if you find yourself unable to repay what you owe on the registration loan, instead of just losing your vehicle, the lender can also take other measures in order to recoup the loan amount.
So, it is in your best interest to ensure you budget as carefully as possible beforehand to ensure you don’t find yourself in the position of being unable to repay both loans. To give yourself the best chance of success when dealing with auto title and registration loans, find a reputable lender who won’t add on fees or increase the interest rate, know the total cost and term of a loan that you can and the one you can’t accept, and get any questions or concerns answered beforehand. Don’t necessarily sign with the first offer you receive and also try your best to avoid overspending or running into any unexpected expenses until you’ve repaid what you owe from any auto title and registration loans.