Getting a loan through a bank with a poor credit score can be extremely challenging and frustrating. Unfortunately, car title loans can have interest rates of up to 25% or more a month, typically higher than banks offer. Add to that, repaying the loan does not help build your credit.
While you can use the interest rate to compare loan offers, they can be misleading. Loan providers will often cite their low-interest rates and exclude the fact that they have incredibly high lender fees that can take you by surprise. To more accurately compare loan offers, look at the annual percentage rate (APR), which includes lender fees and is a better representation of how much you’d have to pay back after one year.
Car title loans can easily have an APR of 300%, put you at risk of having your vehicle repossessed, and do not help build your credit score, so taking out a personal loan from your bank may be a better option. To ensure you are getting the best deal, you should compare offers from multiple lenders before signing an agreement.
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