Title loans are secured loans whereby your car title (which indicated your ownership of the car) is handed over to the auto lending company when taking out the loan. Requesting for title loans near me can be the best way to escape a dreaded debt cycle that most borrowers find themselves in.
With a title loan, the borrower is not required to issue out their car. Rather, you can still use the vehicle even when your loan is approved, but you still need to stick to the loan agreements. If you compare a title loan application process with requesting for a loan in financial institutions, you will realize that it is easy to apply with the minimal paperwork involved and a faster approval process. If you can repay the debt on time, be sure that a title loan is one of the best options to meet your short-term financial needs.
The maximum loan amount that a borrower qualifies for in auto title loans depends on the value of their vehicle. Most title loans near me lenders offer a 25-50% the value of your car, although there are also moneylenders who are more than willing to offer up to 75% only if you have a good credit check and you have the financial capacity repay the loan on the maturity date. Title loan lenders also have varied interest rates on the loan which is advisable that you shop around to find the most suitable lender before issuing your vehicle as collateral for a title loan.
If you do not comply with the loan agreements by not making your payments on time, the auto loan company has the right to repossess your car and sell it to recover the debt. Depending on your state laws, you may or may not be eligible for the extra profits made from the sale of your car. This is why it is always important to be sure that you can pay the loan on time before committing yourself to one. If not, there are also a number of unsecured loan option you can apply for including personal loans, payday loans, and signature loans.
One benefit that comes with requesting for title loans near me is that they are very easy to apply. All you have to do is issue all the documents required by the lender. After that, you will be required to present your vehicle for inspection and evaluation. After the loan is approved, you will be expected to issue your vehicle title as collateral for the loan. You are, however, allowed to continue using your vehicle. The policies involving car title loans differ from one state to another. Borrowers with a bad credit score can also apply for a loan since title loans are basically for borrowers with bad credit history. After you repay the loan in full (which includes the principal amount, interest rates and fees incurred), you will get your car title back. Title loans are ideal for borrowers who do not have an attractive credit history to qualify for loans in conventional institutions.
Car and motorcycle title loans attract higher rates compared to other loan types. But since the loans are meant for short-term funding, this should not discourage you from requesting for the loan. The department of business oversight also supervises the interest rates for car title loans, but the rates still vary from one lender to another. Another advantage that comes with title loans is that you are able to negotiate the payment plan with your lender. It is therefore important that you select the best company that will not only focus on advancing the loan to you but should also educate you on how the loan works and offer affordable rates with no hidden charges. So if you asking yourself “how high can the interest rates be?” It is also important to ask “is there a better option to raise instant cash?”
Title loans are usually short-term. Some lenders offer a payment plan that takes longer for all the payments to be made, but others don’t. There are also lenders who execute pre-payment penalties if you decide to repay the loan earlier than the due date. This means that the borrower will have to make monthly payments until the loan term ends.
Car title loans can be the last resort for individuals with a poor credit score. But just like any other type of loan, there is always the good and the bad side. One of the benefits that come with a title loan is the fast approval rate which can be helpful when you need emergency funding. The fact that you can still use your vehicle after having your loan approved also comes as a plus. There is also less paperwork involved during the loan request process. However, it is essential that you only take out the loan if you are sure that you will be able to make payments on time. Having said that, failure to pay the loan can put your car and credit score at risk. If you default, your credit history will be highly affected and besides, you may not be eligible for having other loans approved in future.
Whether or not a car title loan is the best option for you depends on a number of factors. Individuals are different, and so are the needs. Car title loans can be helpful if you need some urgent funding.