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All About Car Title Loans

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If you are short on cash and you own your car outright, the equity in your vehicle can provide cash to you quickly. Car title loans are a way to bring in some cash by exchanging your car’s title for those funds. There are advantages and disadvantages for these kinds of loans, but if you play it right, you may benefit from this lending option.

Get Money Fast

If you need money fast, then a car title loan can help. There are lenders who specialize in these types of loans and will provide you with money, usually within 24 to 48 hours of your application.

car Loans

Typically, you would bring your car to the lender for his personal review and based on his observation he will determine whether you get a loan or not. Clearly, if your car is newer and in good running order, then you are more likely to get a loan. If the car is a rust bucket and it barely slid into the lender’s lot, don’t count on receiving approval.

Car title loans are appealing to consumers, especially if they have limited means and they don’t want to go through the credit process. Indeed, no credit check is ever performed. Nor will the lender perform a background check explains TitleBucks, Inc.

What the Lender Gets

As for the lender, it may seem like he is taking a big risk by lending you money, right? No, not really. What he gets in exchange for money is the title to the car. If you default on the loan, then the car is his. Moreover, you probably won’t get as much money for the car as it is worth. The lender would then sell it and make a tidy profit.

Even should you default on the loan, you would still drive the car until it was repossessed. Likely, your lender will do everything in his power to help you out, including extending the loan or allowing you to catch up on payments.

One of the disadvantages of a car title loan is that they are short loans, usually for no more than a month. When the loan comes due, you must repay what you borrowed, plus interest and fees. If you ask for an extension, you’ll pay additional fees and more interest. Thus, it behooves you to get your loan paid off as soon as possible.

You should also know that if you default on the loan and the lender sells the car at a loss, then you may be required to pay the deficiency. In this case you not only lost your mode of transportation, but you will be socked with a bill. Worse, you may no longer have any means to pay what you owe if you lose your job because you cannot get to work.

Research Online

When looking for a car title loan company, do your research online. There are a number of established businesses with a good track record. You will want to read the customer reviews too in a bid to ensure that you are comfortable with the business. You might contact the Better Business Bureau and your state’s office of the attorney general to see if the company is in good standing.

Once you decide on a company, read the fine print very carefully. You may discover that the interest rate is high or that you will be penalized for paying off the loan early. If you don’t understand a particular point, then contact the company, speak with a representative and only make a decision once you are satisfied.