You can’t talk about the most popular types of installment loans and fail to mention car title loans; and for good reason. These loans are easy to apply for and qualify for and don’t have stringent credit requirements and a car payment calculator. However, before you apply for a car title loan, you need to figure out how much you can afford to borrow. That way, you can avoid getting in over your head.
While you can use a car payment calculator, they are not always accurate. That’s right, a car payment calculator can only give a smart guess. To get a more precise number, you need to consider the following factors:
Your Current Financial Situation
One of the best ways to figure out how much you can afford is to take a close look at your current financial situation. Start by evaluating your income and expenses. How much money do you have coming in each month, and how much are you spending?
Make sure to include all of your fixed expenses, like your mortgage or rent payment, as well as your variable expenses, like groceries, transportation costs, and credit card payments. Once you have a clear picture of your monthly cash flow, you can start to assess how much you can realistically afford to spend on a car title loan.
For example, if you’re only bringing in $1,500 per month and your monthly expenses add up to $1400, you probably won’t be able to comfortably afford a loan payment of $200. On the other hand, if you’re bringing in $2,500 per month and your monthly expenses are only $1,200, a car title loan payment of $200 might be manageable.
The Value of Your Car
Your car’s value ranks highest among the factors lenders use to determine how much they’re willing to loan you. But how can you tell how much your car is worth? Here are a few tips on how to determine your car’s value.
- Check NADA. This respected website provides accurate estimates of what cars are selling in your area. Simply enter your car’s details and NADA will provide an estimate of its value.
- Compare prices online. In addition to checking NADA, it’s also a good idea to see what similar cars are selling on websites like Craigslist and eBay. This will give you a sense of what buyers are actually willing to pay for a car like yours.
- Bring your car to Florida Title’s office. If you’re not comfortable relying on an online estimate, you can always bring your car to Florida Title’s offices for a quick inspection. We’ll access your vehicle and provide a more detailed estimate of its value. You can then use this information to decide the loan amount you’re comfortable with.
How to Determine the Right Car Title Loan Amount for You
Loan Purpose
The first factor to consider when determining how much to borrow is your loan purpose. Do you need the money for an emergency expense? A large purchase? To consolidate debt? Asking yourself these questions will help you narrow down the amount you should borrow.
For example, if you’re only looking to cover a small expense, then a smaller loan might be all that you need. On the other hand, if you’re hoping to make a major purchase or consolidate multiple debts, then a larger loan could be a better option.
Ability to Repay
The second factor to consider is your ability to repay the loan. You’ll want to make sure that you can comfortably make your loan payments each month without putting yourself in a financial bind. Consider your overall financial picture before deciding on a loan amount. It’s better to err on the side of caution and borrow less than you think you can afford than it is to overextend yourself and struggle to make your payments each month.
Are you in a bind and need quick cash? You can use your car as collateral to secure a car title loan, and once you repay the loan, you get your title back. Florida Title is the premier provider of car title loans, offering the best terms and friendly interest rates. Our loan application is also user-friendly and straightforward.
Get started by requesting an email quote on our website. You can also visit our offices in person and our team will be more than happy to help you through the process. Whichever way you choose we guarantee that you’ll be happy with your decision to work with Florida Title.