Car title loans are very popular among consumers for a lot of reasons. The most common is the ability to provide fast cash for emergency situations or when your cash flow is between paydays. It is very much unlike bank loans where you’d be required to have a co-signer, good credit history and more often than not, a collateral. Car title loans are basically easy to obtain with only a few minimum requirements. They basically work by allowing you to tap into the equity in a vehicle that you own. These may sound too good to be true but what is a title loan?
Title loans is a type of secured loan where borrowers can use their vehicle as collateral. It is a quick and convenient way for people who has a car to get cash. It is important to keep in mind that you should own your car since borrowers who get title loans must allow the lender to place a lien on the title and then temporarily surrender the paper copy of their vehicle title in exchange for the loan amount requested.
Who qualifies and what are the requirements to get this type of loan?
Since this type of loan is based on the equity amount you’ve built with your car, it is required that you own your car outright. If you still owe money on your car loan and your car title’s still in the hands of the bank, you can’t use it as collateral for a loan. If you own your car 100%, then you can apply for this type of loan. There are no credit score requirements or background checks involved. Other requirements that might be requested may include proof residence and or proof of your income. After assessing the value of the car with an inspection, there is usually a small amount of paperwork to be filled out and then the money is loaned to you.
Car title loans is a simple process and you can expect it to be usually processed within a day or two. It could be the perfect type of loan for you if you have less than stellar credit history. This includes bankruptcies, foreclosures and collections accounts in your credit file. Since there are no credit checks, anyone that owns a car can get an auto title loan.
The best car title loan companies are those that can offer quick cash to you that has low rates and most important, a high percentage approval rate. If you’re prepared to repay them quickly, car title loans are a low-interest way to get cash on a short notice, but as with any other loans, it is also essential that you understand the risks involved.
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