Standard Terms Used in Auto Title Loan Documents
We want our customers to be as informed as possible about the typical structure and terminology of typical auto title loans. While the wording and setup of loans vary from lender to lender, and from state to state, there are some common definitions that should be understood by any potential borrower.
Most people already understand the general way loans are structured, but have questions about a few specific topics, like:
- Can I use the funds any way I want?
- How long do I have to repay?
- Can I repay earlier than scheduled without a penalty?
- And others
Communication between lenders and borrowers is vitally important, so we strive to help our auto title loan clients understand how loans work in general. Feel free to contact us anytime with questions you might have about this topic. We are always glad to help explain the process and make things as clear as possible.
So, what are the standard parts of an auto title loan contract?
What Does a Typical Loan Look Like?
Like many other types of loans, auto title loans typically contain things like interest, a repayment period, sometimes a co-signer, and other aspects of standard loan agreements. The list below highlights the terms you will encounter when getting an auto title loan from us. Of course, the following list is just an example of the most common terminology used, so don’t worry if you encounter other terms within a complete loan agreement.
- Interest: This is the fee that lenders charge their customers who borrow money. Along with the principle (the amount of money borrowed), interest must be repaid. In LoanMart’s case, interest is evenly divided into the monthly payments as long as payments are made on or before the due date. (See Amortization, below).
- Fund Use: Depending on the type of loan and the lender, there can be restrictions on how loan proceeds are used by the borrower. For LoanMart auto title loans, there are no requirements about how borrowers spend the money. Of course, it is always advisable to spend responsibly.
- Repayment methods: Lenders sometimes require very specific methods of repayment, like automatic bank deductions or payments by credit card. At LoanMart, we make the process simple for our clients by offering various payment options such as walk-in payment, mail, paying online or over the phone.
- Repayment period: The agreed time period within which a borrower can repay the loan is called the repayment, or payment period. It is usually stated up front in loan documents.
- Amortization: A way of calculating the value of each loan payment over the life of the loan. LoanMart car title loans are fully amortized, meaning each payment is for the same amount of money.
- Collateral: Any asset a borrower pledges as security for a loan. Naturally, auto title loans use vehicle titles as collateral.
- Co-signer: Anyone who signs a loan agreement along with the primary applicant is a co-signer. The co-signer shares the same responsibilities as the primary applicant throughout the life of the loan.
Every Loan is Unique
Even though auto title loans contain much common terminology, keep in mind that each loan is unique, based upon a particular borrower’s financial situation, vehicle value, ability to make monthly payments and several other factors.
Get Your Questions Answered
If you have any questions about the definitions or want more information about how auto title loans work, just give us a call at 928-615-9458. Our LoanMart agents are available Monday – Friday 8 a.m. – 9 p.m. PST and Saturday 10 a.m. – 6 p.m. PST and ready to answer your questions, and you can begin the process whenever you are ready.