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Benefits of title loans
If you’ve been looking for ways to get hold of some extra money quickly, you may well have considered applying for an installment loan or a payday loan. But there could be another way to borrow money if you currently own your own vehicle outright. Many people with a steady income and their own car could benefit from taking out an auto title loan, which involves accessing funds in exchange for handing over your vehicle title as collateral. Here are some of the key benefits of title loans to help you decide if this type of borrowing might be right for you:
1. Quick access to cash
You should be able to complete an auto title loan application and have the funds in your bank account within just a few days. You may be eligible for a title loan if you have a steady income and own your own vehicle outright. If you meet these criteria, then the process involves completing the application form, signing the title loan paperwork, and arranging a convenient time for a representative to take photos of your vehicle and collect its title. You may even be able to receive the funds in as little as 24 hours, although most auto title loans take up to one week to arrange.
2. No need for a credit check
Most loans involve running a credit check to ensure the applicant is creditworthy and able to meet their financial obligations on time. However, a title loan does not require this step, which often poses something of a stumbling block to those with a poor credit score. As long as you have a steady income to enable you to repay the loan and own your own vehicle outright, you should be eligible for an auto title loan.
3. You can still use your own vehicle
Taking out an auto title loan means giving up the title to your vehicle while you repay the money you have borrowed – but this doesn’t mean you can’t continue to drive your car. The lender treats the title to your vehicle as collateral and returns it after you have made your final repayment. So in terms of being able to travel from A to B, daily life won’t change when you take out an auto title loan.
4. Cheaper than a cash advance
Cash advances and payday loans can be expensive ways of borrowing money. In contrast, title loans tend to work out cheaper as they usually offer lower interest rates. This is because a title loan is secured to your car, using your vehicle’s title as collateral. The lender, therefore, doesn’t need to charge high-interest rates as the vehicle title provides them with a layer of security.
5. Quick repayment schedules
You’ll know in advance how much you need to repay and by when. Most people repay their title loans as soon as their next payday arrives. However, some people require several paydays if they have taken out a large title loan. One of the key benefits of title loans is that they can be given in any amount, based on the value of your vehicle. So if you only borrow a relatively small amount of money, you can soon repay the funds and reclaim the title to your vehicle.
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