Oct 24 2016

How to Choose Pink Slip Loans #peer #to #peer #loans

#pink slip loans

How to Choose Pink Slip Loans

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Narrow the list of potential lending organizations to those with licenses from your state or memberships in professional or consumer organizations, where applicable. California requires all legitimate lending institutions to acquire a license from the state. Some professional and consumer credentials include the Better Business Bureau and the American Bankers Association.

Look for organizations with multiple branches. These lending organizations have established a brand and are more likely reputable.

File a free credit score report before securing a pink slip loan. Your credit score will partly determine the interest rate and repayment schedule of a loan; you should not apply for a loan without knowing this number.

Shop for the best interest rate — these rates typically vary depending on an applicant’s credit score, but they also vary from one lending institution to the next. Pink slip loans can carry rates as high as 30 percent; this fee increases a $1,000 loan to a repayment of $1,300. A 20 percent interest rate would only increase the repayment amount on the same loan to $1,200.

Calculate the amount of cash you need in a loan and weigh this number against the value of your car. You can find the value of your car in Kelley Blue Book, the National Automobile Dealers Association or Edmunds, among others. Pink slip loan organizations may lend up to 120 percent of the value of your car.

Determine whether or not you can pay back the loan by the end of the lending period. Lending periods for pink slip loans last between 30 and 60 days; if you cannot pay back the loan by the end of that period, the lending organization may offer you an extended repayment period at a higher interest rate. If you do not pay back the loan by the end of that extended period, you forfeit your vehicle.

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