There are many types of car loans. Various lenders have come up with different schemes to meet the financing needs of people who want to buy their dream car. The lenders can be either banks or other financial institutions. A car title loan is simply a way to borrow money using the equity in your vehicle as collateral.
Easiest One to Apply
A car title loan is one of the easiest loans to get. In this loan, the car’s certificate of title is kept as security by the lender. The amount of the loan is usually less than the market value of the car. In the eventuality that you, the borrower, default on your payments, then the lender repossesses the car and liquidates it to recover the outstanding loan amount.
A car title loan is a loan that provides funds similar to that of a pay day loan. In other words, if you own your vehicle and have its title, you may be able to borrow against the value of the vehicle. Often, this is done when individuals need cash quickly for an emergency situation or just need cash until their next pay day comes around.
This type of loan is for short periods only. Typically it will be between 14 days to a month in duration. Since the loan term is short, the interest rates are usually quite high. However, credit checks are not always done, hence even people with bad credit can apply for a car title loan. This can be a convenient and quick way to arrange for cash in case of an emergency.
When payments are due, you have the option to pay the interest only or pay the loan in full. Car title loans usually allow for greater amounts to be loaned compared to payday loans. You may choose the option that best fits your needs. With this type of loan, once the loan is repaid the lender will return the title. However, in case of a default you will lose your car and have a blemish on your credit record.
Here Are Some Answers To Your Questions On Car Title Loans
People have many questions when searching for a car title loan. One of them is whether the borrower is allowed to use the car during the time the car is pledged to the lending institution. Absolutely…there is no need to worry on that point. The vehicle remains in your possession. You can use the car during the repayment period, only the certificate of title and a set of keys are given to the lender.
Another common query that people have is about the eligibility requirements. There are certain documents that you need to produce; the first being the title of the car in your name. If you do not have clear title to the vehicle, you will not be eligible for a loan. You must also have proof of your identity, car insurance, your employment and proof of income. Also, in most states,you have to be 21 years or older to apply for such a loan.
Once the loan has been approved, an agreement will be signed between the lender and the borrower. The borrowers are expected to read the terms and conditions of the loan (and make sure you fully understand them) before signing on the dotted line.
A car title loan may seem like an easy way to get quick money, and it can be in certain circumstances, but don’t forget that you are putting up your vehicle as collateral. If you have any doubt about your ability to repay this type of loan, don’t do it.
When you are looking for an auto loan, you may take a look at car loans 4 u which may have the one that well suit your need.