Benefits of car title loans

Benefits of car title loans

If you are employed, maybe you are on a day job, at a specific date that is far away from your payday, the financial struggles in your life are at their best at this time. By saying so, it means that if you meet with an emergency, it becomes a pain to try and solve it.

Emergencies could range from repayments of mortgage loans, school fees for your kids to unexpected situations like illness and accidents. All these require money to settle. It’s never that easy to cope, especially if the only source of income you have is what you get at the end of the month.

Car title loans have emerged as a great alternative to help you get out of tricky financial situations. It’s all about getting yourself a lifeline before you receive your salary by the month-end payday.

According to statistics, car title loans are becoming popular among people these days.

A car title loan requires you to use your car as collateral. Loan amounts can range from between $150- $1500 but it could be as high as $5000. The loan amount is determined by the value of the car that you are using as collateral. The loan amount is about 45% of the car’s market worth at the time of loan application.

Loan application

car title loans benefits

car title loans benefits

You can approach the lending company either by physically making your way to the office or apply online. After the application is submitted, you should submit your car title and its photo identification.

The company also asks for a copy of the car keys and then asks you to buy a roadside plan. After processing your loan, the company gives you the loan amount in the form of a check or deposit the money into your deposit account.

The company expects you to pay back the money as stipulated by the contract that you sign upon getting the loan. It includes the interest and other fees. If you cannot repay the loan, the company may end up repossessing your car and selling it to recover the outstanding loan.

A car title loan, however, has many advantages. That is why it is very popular among people.

1.  Ability to provide cash

A car title loan is designed to help you in times of financial difficulties. It offers cash conveniently and quickly just when you need it.

The loan helps you get out of financially difficult situations by providing cash to solve the problem at hand. We are talking about solving all the emergencies that may happen at a time when your next payday is still a few weeks away.

2.  Getting your money fast

Getting your money fast

Getting your money fast

The application and approval of a car title loan take a very short time. In fact, you could be getting your loan in a matter of a day or two. Compared to other types of loans, this is quite fast. It does not require you to keep making applications and waiting in line at the banks.

After you are approved for a car title loan, your car is then inspected and its value is determined. The lender and you will discuss before the former lays down the terms and conditions for the car title loan.

The speed of the car title loan processing and approval is a result of the simplicity of the loan and how it is designed.

3. Minimal requirements

For your loan to be processed, you will need to actually own a car. There are no bank account or credit checks. The car which you will be using as collateral for the car title loan is what matters.

Therefore, it is easy to process the loan and get the money that you need in less than two days. The credentials needed include basic personal information, the car title, the car itself during the application for assessing its value and its photo identification. Within a day or two, the loan is processed and you are on your way to solving your emergency.

Other loans require a lot of credentials and background checks before they approve the loan. This takes a lot of time. This is why most people are turning to car title loans for quick cash solutions.

4. Use the car as usual

Use the car as usual

Use the car as usual

A car title loan is very different from going to the pawnshop. This is because it allows you to continue using the car which you had used as collateral as you normally do.

The only thing the car title lending company needs is the car title. You are required to do is keep making prompt payments for the car title loan to avoid repossession of the vehicle.    

If you go to pawnshops, they will require the car or automobile to be left in their care until the loan has been repaid in full. It is only then that you will get your car back.

5. Credit scores

As stated earlier, the only documents and credentials needed are just your personal details, the car title and the car and its photo identifications. It is important to understand that a car title loan uses the car as collateral.

Essentially the car is the loan’s source of security. For this reason, the lenders barely look at the credit score of the borrower. The only thing they need is the car title.

Looking at traditional loans and other types of loans, the credit scores of the borrower are very important for the loan to be approved. Hence, car title loan are very suitable for most people as long as they own a car.

6.  Cheaper than cash advances

Car title loans are way cheaper

Car title loans are way cheaper

Car title loans are way cheaper than cash advances. The annual percentage rate (the real cost of borrowing) of cash advances are at about 400% or 450% compared to 300% annual percentage rate of car title loans.

While interest rates for both types of loans are quite high, interest rates for car title loans are definitely lower than those of cash advances.

As a borrower, you want a loan which with a low-interest rate. Hence, most people are attracted to car title loans.

7. Convenient repayment options

Car title loans offer a variety of loan repayment options. They include physical over-the-counter payment and online payment, among others. Compared to other types of loan servicing, this is flexible and efficient. You can make payment from anywhere at any time of your choice. This makes a car title loan very attractive.

8. No stress

A car title loans relieve you from financial stress. Emergencies are easily solved since the loan is approved. Moreover, you don’t need to stress about your credit score.

The basics of car title loans

Need fast cash?

Need fast cash?

The basics of car title loans- What are they?

Every person would love the idea of receiving fast cash when they need it. More often than not, they meet with some obstructions along the way. Having a bad credit score is a huge disadvantage when it comes to borrowing bank loans. Luckily, there are some types of loans which do not take into account credit scores at all.

Car title loans are one type of such loans. A car title loan is a secured loan that allows borrowers to use their cars as collateral.

The lending company determines your car’s price based on the worth of the car in relation to the price that it would cost in the auction market. The lending company holds your car’s title until you pay off the whole loan within the stipulated time frame.

In the event that you default on your repayment, the lender is allowed to repossess your car and sell it to recover outstanding debts. However, if the borrower repays the loan on time, the lender will return the car’s title back to you. 

Car title loans are generally short-term loans and are associated with higher interest rates than other types of loans. The high-interest rates act as a guarantee for lenders as they cover the risk of lending to borrowers who are already in financial difficulties. In loans such as car title loans, the borrower’s credit history is not the lender’s concern. The value and condition of the car that is being used as collateral are of utmost importance. Hence, it is possible for borrowers with bad credit to secure a loan.

  • Eligibility of car title loans

Eligibility of car title loans

Eligibility of car title loans

1. Proof of your income


To secure a car title loan, you are expected to show your payslip and other necessary evidence of a regular income. As car title loans are associated with hefty interest rates, the lending company expects you to have a regular income so that you can fund the repayments.

2. Minimum age


You must be 18 years and older for you to secure a car title loan.

3. Personal identification


To secure a car title loan, you are required to have certain forms of valid identification These include a driver’s license, car registration number, and car insurance.

4. Proof of residency


You are also expected to give proof that you live in the said state. To prove this, you can provide some form of relevant mail.

  • Car title loans online

Car title loans online

Car title loans online

Many title loan companies offer online application for title loans. This application requires you to give basic information. Such information include:

1. Personal information


This includes your name, address, and contact telephone numbers.

2. Vehicle information


This includes the make, mileage, color and vehicle identification number.

3. Insurance information


You may need to reveal your insurance policy numbers or increase the coverage amount while taking up a car title loan.

  • Loan calculator

The amount of loan that you can secure is dependent on the worth of your vehicle. The lender generally offers a loan that is about 30% of the vehicle’s worth. This guarantees the lender of good profit in the event that they repossess the vehicle and sell it at an auction if you were to default on repayments.

  • Why car title loans are good borrowing options

No credit checks

No credit checks

Most borrowers take out car title loans due to their benefits.

1. Fast approval


With car title loans, you can get your money in just a few days or in a matter of hours. The money is either sent to your bank account or you can receive a check.

2. No credit checks


Many people who struggle with a poor credit score. With car title loan, lenders are not concerned with your credit score. Instead, the value and condition of the vehicle that is put up as collateral are very important to them.

3. You get to keep your car


With car title loans, you get the loan while still getting to keep your car. The only thing that the lender requires is that you give them a set of the car keys and its title until the loan is fully repaid.

4. Easy to qualify for


Title loans are very easy to secure. There are only a few requirements that should be met for you to be eligible. These are proof of income and residency, meet the minimum age and own a vehicle.

5. Less paperwork


Car title loans are available online. This minimizes tedious paperwork.

  • Disadvantages of car title loans

 Danger of losing your car

Danger of losing your car

1. Higher interest rates


Car title loans come with unreasonably huge interest rates. Interest rates may even exceed up to 300% at certain times.

2. Payment and fees


Lenders of title loans frequently charge outrageous fees and interest rates which end up leaving you even more in debt.

3. Danger of losing your car  

   
Car title loans are secured with your vehicle as collateral. In the event that you default in repayment, the lender has the right to repossess your vehicle and sell it.

  • Car title lenders

things you should consider

things you should consider

Most people are susceptible to fraud from rogue lenders and companies. Before committing to a car title loan, there are certain things you should consider.

1. You should apply for car title loans during emergency financial situations only.

2. Always borrow the smallest amount possible to avoid burdening yourself with unnecessary debt that would land you in more financial difficulty.

3. Many lenders are out to charge outrageous interest rates. Before committing to a car title loan, make sure you negotiate for the lowest possible interest rate.

4. Look for a lender that has won high approval ratings from customers over time.

  • Alternatives to car title loans

It is of utmost importance for any person who wants to take out a loan to evaluate what other alternatives are available. Compare the interest rates, penalties, fees and other options before making a decision.

1. Payday loans


Although payday loans also come with high interests, you do not stand the risk of losing your car in case of loan  default or late repayment.

2. Personal loans


Personal loans have a fixed number of months which you have to pay back your loans. With this, you can easily come up with a repayment plan. Personal loans come with interest rates that are lower than those of car title loans.

3. Sell your valuables (pawning)


If you are in dire need of fast cash, you can consider pawning some of your valuables such as jewelry. You can sell these items on online platforms such as eBay and Amazon.

4. Emergency loans 

       
These are short-term unsecured loans that come with low-interest rates. Emergency loans can be offered by companies with an emergency loan program for employees making the borrowing experience cheaper and easier.