Your financial situation may not be that good and you need urgent cash to pay your bills or cater for emergency situations. If you have a car under your name, then requesting for a car loan title can be the best solution for you. With car title loans, you can get access to quick short-term loans and issue the car title as guarantee of payment. You might have seen the adverts but you are not yet aware of what title loans are, or how they work. So what exactly are car title loans, and are there any benefits that come with the loan?
Car title loans (also referred to as auto-title loans) are short-term secured loans. With title loans, the borrower is required to issue a property title to the lender which is taken back after the loan is fully repaid. If you fail to repay the loan on time or if you default payments altogether, the lender will repossess your property and resell it to recover the loan. With a car title loan, the borrower agrees to issue their car title as collateral before taking out the loan. Most lenders issue a car title loan up to 50% of the value of your car. Lenders require the loan to be paid within 30 days. However, loan terms vary depending on the lender.
If you are in urgent need of cash and you possess an asset that can be issued as collateral, filling out a car title loan form can be the best alternative for you. One advantage that comes with car title loans is that you do not need to have a good credit history for you to obtain a loan. Provided you have a vehicle title under your name and can show proof of income, most lenders will easily have your loan approved.
Anyone who owns a vehicle can get a car title loan. The difference between the car value and what you owe on the car is your equity in the vehicle. What a title loan company offers is a portion of the equity in your car. Usually, lenders will also require you to have a valid car insurance. Once your loan is approved, the car title remains with the lender. But the borrower is allowed to continue using the car.
Auto loan lenders are available both online and in-store. One advantage of car title loans online is that you do not have to travel to a physical location for your loan to be approved. Whether you apply for a car title loan online or in-store, borrowers will require you to fill a loan request form. If you are applying for the loan online, you will be issued with a list of auto loan lenders near you. You are also required to present your vehicle and the title, proof of insurance and your government issued ID card or passport. There are also lenders who will require you to leave a duplicate set of the vehicle keys with them.
Before approving the loan, auto loan lenders will issue you with the loan terms and conditions, usually in writing. In the loan terms, the lenders disclose the total cost of the loan, (which includes the principal amount, total fees and interest) and the repayment plan. By going through the terms and conditions of the loan, you will be fully aware of the total amount to pay back and know whether you can afford to repay the loan on time. Once your loan request form is approved, the money will be approved within 2-3 business days and the lender remains with your car title. You can only get the title back when the loan is repaid in full.
Borrowers have three options to repay the loan. These include:
With automated repayment plan, the borrower authorizes the lender to debit the money directly from their bank account.
If you fail to adhere to the loan repayment plan, the lender will roll over the loan to a new debt. This means that you will have to incur additional interest rate and fees. If you completely fail to repay the loan, then the auto loan lender will repossess your car. The vehicle can then be sold for the loan to be recovered. Depending on your state law on car title lending, you may or may not be able to get extra profits made after your car is sold. The maximum loan amount also varies depending on your car value.
After your loan request form is approved, the money will be credited to your account within 1-2 business days. Some lenders can even have your money approved within 24 hours, which is basically one business day. This can come in handy when you need instant cash to cater for emergency situations. Since you issue your car as collateral, you also do not need to have a good credit check for you to qualify for the loan. Borrowers are also allowed to continue using their vehicle after taking out the loan.
Even before taking out a loan with your vehicle as collateral, it is important to first find out if you can afford to repay the loan on time. This is because failure to comply with the loan repayment plan can cost your car. Your loan can also be rolled over, which means that you will have to pay more amounts on interest, making the loan very expensive.
If you need instant cash and you are willing to issue your vehicle as collateral, requesting for a title loan can be a perfect alternative to meet your financial needs. With a simple title loan process, you will have quick access to cash. The good thing with title loans is that anyone can apply, provided you have an asset to issue as collateral. You can act now by filling out a loan request form and ensure your financial needs are met quickly.