Understanding What Title Loans Are
A title loan is an alternative for people who have less than stellar credit scores but are in need
extra money. You don’t need to provide a reason for why you’re borrowing money. You don’t even need to give your credit history. All you need is to give the title of your car as security for the loan.
Title loans are available in most cities and states. For example, you can get title loans Lancaster CA. There are also several lenders in Texas.
Auto title loans are interchangeably referred to as car title loans or simply, title loans. They are categorized as collateral loans. Here, you use the title of your car as a security. Your loan value
will vary depending on the value of your collateral or security. The loan value is typically pegged below the appraised value of your collateral, usually at around 50% of the collateral’s value.
Title loans are short-term loans. And the loan value of these loans is small. They range from a few hundred to several thousands. This is why the application process is not stringent. You can get approved in as quick as one day.
Acceptable Vehicle Types
Auto title lenders offer a variety of loan options. They accept almost all types of vehicles. The more common types are the following:
1.Cars. This is the most popular type of vehicle used as security. You most probably have is the type of vehicle. This is because this is what the average consumer would own. Thus, it is the easiest to provide.
2.Motorcycles. Motorcycle owners can also avail of title loans. Two-wheeled vehicles are also accepted as collateral.
3.SUVs. Short for Sport Utility Vehicles, SUVs, are also popular among Americans as their choice of vehicle. It provides more room than a car without sacrificing convenience for everyday use. Your valuation will depend on the make and year of your SUV. A newer SUV will likely give you a higher loan value.
4.RVs. Recreational vehicles are available in different classes. Regardless, they all have cabins which are good as a temporary space. They’re also good as collateral for title loans.
5.Trucks. Business owners who use trucks for their transporting needs can use them as security for title loans. If you’re one of them, you might consider this the next time you need additional funding.
The types of vehicles you can use as security in a title loan are not limited to these five. These are simply the ones generally used. If you’re not sure whether you can use your vehicle’s
title as security, then do not hesitate to check with your local title lender first.
Who Should Get A Title Loan
If you have a bad credit score, then this might be the loan for you. Traditional loans from banks and other lending companies require background checks and even securities. After they look into your capacity to repay them, then that’s just when they finally approve your loan.
However, if you do not want that hassle and do not have the time, then just get an auto title loan. It’s the easier way to obtain a loan for those own a car and have an immediate need for some cash. They won’t even inquire your reason for taking a loan out.
You’ll want to pay it back though as soon as possible. Title loans are more convenient to get. But they also charge higher interest rates as a result. This is the price of having less requirements for approval. As long as you pay back your debt when it matures, you won’t have any problem.
Choosing Which Title Lender to Borrow From
Research your options before you commit to any title lender. Understand what the costs of borrowing will be and if you can afford them. There are a lot of companies that offer title loans depending on your area. And chances are, they will not be giving you the same loan value for the same car. Or offering you the same interest rate and payment scheme for the same amount of loan.
It may also be important to know the application and approval process of each title lender. Find one which is genuinely quick and easy. And delivers on their claim of not checking your credit score. Some applications even only take five minutes.
Weigh your choices. And then choose which one is best for you. Of if getting one at all is the right decision.
As with any debt, what’s important is that you eventually pay back your loan. Be mindful of the refinancing charges too. You’ll have to pay these if you can’t pay back your loan on maturity date – the date when the lender can demand payment from you. Interest rates are also higher in title loans, so you don’t want that accumulating.
Title loans are great for emergency cash needs. They don’t take long to get and don’t necessitate much for approval. But always remember to assess your situation before you borrow. This way, you end up getting the best solution for your financial problems.