What is a car title loan and how can I use it to my advantage?
Emergency Funds
What do you do in a situation when you need funds urgently? People approach banks for loans, and in most cases, may even get one. Banks have lengthy paperwork, which they will be required to complete. They may be rejected for the loan if they do not qualify. The only option left for people to do is to go to the local loan store and make an application for an expensive payday loan. There is an option that will give you money quickly as well as assure that you will never be rejected for the loan. Such loans are known as Car Title Loans.
Instant Approvals
Car title loans are approved almost instantly. You will be required to hand over the title of your car to the lender, which will assure them of the money that they agree to loan you. These are known as secured loans of sorts. As you hand over the title of your car, you should be aware that is case of a default, you risk losing it. Lenders are willing to approve such applications for loans without any hesitation as they are aware about the facts. The money will be transferred to your account in a matter of hours. Running around to complete large amounts of paperwork is something you will avoid. Your borrowings will depend upon the resale value of your car. Your eligibility for a higher amount lies with a new car that has a clear title, than with an old car.
Requirements
The only aspect that lenders look for when approving a car title loan is whether or not you have a clear title on the car. If you have an unpaid debt on the car you will not be eligible for the car title loan. The title in this case will be with the lenders of your car loan. Therefore you will need an absolutely clear title on the car before you can fill out an application.
Duration of the Car Title Loan
Car title loans are usually offered for very short periods. The money has to be returned within 15 to 30 days. This may sound the same as a payday loan, which is true. However, unlike a payday loan, car title loans come with lower interest rates because they are considered secure. You will not be required to pay extra charges as interest and other fees.
Rules Remain the Same
Just because you have offered the title of your car against the loan, you are not entitled to delaying payments when they are due. You will have to stay with the repayment schedule without fail. You will be liable for heavy rollover charges if you do not make payments in time. In extreme cases, you may lose your car to the lenders against overdue payments. You will be required to remain extra careful about this and return the money on or before the due date. After all, the title of the car is more valuable than a paltry loan.
