Amortized Title Loans Or Interest Only Title Loans?
When you are looking to get a car title loan, it is important to understand that there are amortized title loans or interest only title loans, and it is important to know what the difference is.
When you are getting an online car title loan, there are many different qualifying factors that go into determining the details of it. The equity value, monthly income, ability to repay the loan, and the terms of the loan.
With our large referral network, we only offer amortized title loans, some other companies will only offer you interest-only title loans, it is important to understand the differences, and what will be better for you.
Amortized Car Title Loans
getting an amortized car title loan means that the monthly payments over the term of the loan will include both interest and principal amounts.
The monthly payment will be made up of the principal part of the payment will go towards the original balance, and the interesting part of the payment will go towards the interest owed.
With an amortized title loan, the loan will be paid off over the term of the loan, so if you have a 24-month loan, at the end of your 24 months with on-time payments, you will have paid off your title loan balance.
All of the equal monthly payments will slowly pay off the loan, including the interest, which will leave you with no large balance at the end of the loan term.
TFC Title Loans will make sure that you have all of the information about the interest, your monthly payments, and an amortization schedule, so you will understand your monthly payments, and the breakdown of the payment.
Interest-Only Title Loans
With interest-only title loans, the monthly payments will be lower, as there will be no principal amount in the payments, only interest payments.
The principal balance, or the amount that you borrowed, will need to be repaid at the end of the loan term, the balloon payment as it is called, will need to be paid in a lump sum at the end of the loan term.
Some people like the idea of smaller monthly payments compared to amortized payments, and they might be more attractive if you only need the loan for the short term, or be planning to pay it off fast.
With interest-only title loans, the principal balance will need to be paid back at the end of the term, if you do not have the full principal balance, you will need the lender to do a rollover title loan, and this is where the lender will extend the loan for a longer term.
The problem with a rollover title loan is that it can be a debt trap, because, you can end up paying interest only, with no end insight.
Conclusion
It is important to understand what type of title loan you are getting and to know the difference between an amortized title loan, and an interest-only title loan.
If you already have an interest-only title loan, you can contact us, and we will help you to refinance your title loan into an amortized title loan so your monthly payment will also go towards lowering your principal balance.
We can get you an amortized title loan from 12 to 36 months, so your monthly payments will fit within your monthly budget, no matter where you are living, we can help you to get a loan using the equity that you have in your vehicle.