There are many times in life that you may find yourself with unexpected expenses. Unfortunately, two-thirds of American households do not have even at least one thousand dollars put away for when the unexpected happens. This is a reason why car title loans exist. They provide those individuals with the chance to take care of these unexpected circumstances without having the credit rating necessary for a personal loan. If you’re looking to apply for a car title loan there are a number of things that are necessary for you to understand before you make that decision to proceed.
What Are Title Loans?
Car title loans can be known by many other names such as pink-slip loans, title pledges, auto equity loans, and title cash advances. A title loan is a shorter-term loan that requires you to provide a free and clear title of your vehicle itself as a form of collateral. You’ll find many lenders out there that offer this type of loan.
These types of loans are easy to obtain which is why they are becoming more popular. Of course, you’ll find they are also highly sought from those with low credit who own a car. You’ll find that in most cases these loan types are short term.
With the car title loan, the lender will put a lien on your vehicle’s title. You will sign a contract that includes the agreement terms with the interest fees you’ll be required to pay.
Credit Factors
When it comes to the loan amount itself, you’ll find that this is set by the value of the vehicle and the condition that the vehicle is in.
What does this mean for you? If you have a lower credit score than you would like, or no credit, it means you can still be approved. You will provide the title, and within a short time, you’ll have the loan amount handed over directly to you. You will just need to focus on paying the loan back monthly.
Get the Loan the Same Day
When you go into the lender’s office to obtain the loan after approval is finalized, you can leave that very day with the loan in hand. Based on the terms of the loan, you will then just pay it back within that period while getting the opportunity to face whatever setback you may have encountered.
Large Amounts of Cash
The range of these types of loans can be from around $2,500 up to even $50,000 depending on the worth of your vehicle. This is what makes this loan option wonderful when it comes to those situations that come up in your life that you didn’t expect. The more your car is valued at, the larger the amount you’ll be able to borrow.
Interest Rate
Interest rates are important to know and to understand. Car title loans are normally required to be paid back within around 24 to 48 months. They include an annual percentage rate which you’ve probably also heard of as called an APR. While this is a larger interest rate than you’ll find with other traditional loans, you have to remember these loans are made available to those individuals with less creditworthiness.
Once you speak with the lender and go over your personal details, an employee will give your car an appraised value, which is basically what it can be sold for at that time. Once this process has been completed, you’ll be provided with the total amount you’re able to borrow from the company. Usually the amount is offered from around 25% up to 85% of the value of your vehicle. As long as you are the owner of the car, you will be able to get this loan type.
Be Positive That You Can Pay It Back
Of course, with any loan type you need to pay it back; however, you really need to put thought into your monthly payment amounts and the period of the entire loan in relation to other things you may be responsible for. This loan type is a courtesy that’s given to those that don’t have great credit or may not have other options. Of course, if there are questions, the lender itself will have employees that are thrilled to speak with you directly to ensure you understand completely.
What If Your Car Isn’t Paid Off?
This is another great benefit that you may not know about. If you still owe money on your car, the lender may be able to take part of your loan amount and in turn, use it to pay off your vehicle. This makes it where you only have one payment that is paid directly to the lender that provided the car title loan. The car title loan employees will work right alongside you to ensure that you’re provided with the very best interest rate possible.
