Since the last recession, banks have increased their restrictions when it comes to loan approvals. In many situations, it makes it almost impossible to get approved for a loan, especially if you have bad credit. Fortunately, many people are discovering how much easier it is to get a car title loan. Title loans don’t require large amounts of documentation or take three weeks to pay out loan funds like banks. Additionally, title lenders don’t turn people down for loans when they have bad credit or a bankruptcy. Borrowers are also free to use the funds from their car title loan for any purpose. If you are seeking a small short-term loan, you could benefit by learning how title loans work and the advantages they provide.
How Auto Title Loans Work
- Applying. You can easily apply online, visit a loan center or apply over the telephone. You must be at least 18 years old to apply for a loan.
- Collateral. Auto title loans are secured loans. To be approved for a loan, you submit your car title as collateral. If a borrower defaults on a loan, the auto used as collateral can be sold by the title lender to recover the cost of the loan.
- Requirements. Applicants must meet minimum loan requirements. Most lenders require that you have some type of income to make your payments. You should own the vehicle outright and have a clear title showing no liens to meet collateral requirements. Vehicles must be in working condition.
- Consultations. Applicants work over the phone with a loan representative to discuss income and repayment plans.
- Contracts. You sign a contract agreeing to pay back the loan according to the terms of the loan.
- Funds. Borrowers may receive their loan funds from loan stores or by electronic wire transfers to bank accounts.
- Payments. Each borrower makes payments according to their repayment schedule listed in the contract.
- Titles. After receiving the final loan payment, lenders return car titles to car owners.
The Advantages of a Car Title Loan
- Poor Credit Is Okay
You cannot be penalized or turned down for auto title loans because of no credit history, bankruptcy or a low credit score. Even if you have previously been turned down for a loan in the past, you could still be approved for a title loan using your car as collateral.
- Fast Cash
You would have to search long and hard to find another lending institution that can payout loan funds as fast as title lenders. The majority of title lenders payout in as little as a day or sooner.
- Competitive Interest Rates
Lenders make their money by charging interest on loans. However, to gain the attention of more people and provide more loans, title lenders typically work hard to find the best possible interest rates. Fortunately, secured loans usually provide better rates for consumers.
- Flexible Repayment Plans & Terms
Legitimate title lenders work hard to counsel borrowers about their financial needs when choosing an affordable repayment plan. Lenders and borrowers are both winners when borrowers have an ideal repayment plan that fits their budget. Choosing the right repayment terms and payment amounts can be critical to the success of a loan.
- Cash for Any Reason
Most banks make you disclose the reason for the loan. However, auto title lenders do not ask or require this information. It is up to the borrower to decide how he or she will use their loan funds. Borrowers can pay monthly bills, catch up on old debt, use the cash for emergencies or anything they want or need.
- No Travel Restrictions
The majority of title lenders allow free use of your auto during the entire loan period. As long as you are making consistent payments, according to your loan repayment plan, you should not have any problems surrounding the use of your automobile.
A car title loan can provide alternative lending, good rates and the cash you need today.