What Should You Know About Car Title Loans?

| April 14, 2013

Car Title LoansCar title loans become very popular today because it is easier to obtain and offers a lot of advantages. One of the great advantages of car title loan is that you will be able to continue using your vehicle right after loan approval.

Car title loans remain to be very attractive to people, especially those who are in urgent need of money. Your credit rating has nothing to do with car title loan because lenders offering car title loan does not conduct credit check. The total amount to be borrowed will be based on the value of your car.

Car title loan application

There are two ways to apply for car title loan. You can personally visit a traditional lending institution or you can apply online. With the advent of the internet, a lot of lenders offer easy instant online loan application.

For speedy process, you should prepare all the needed documents beforehand. Again, there is no credit background check and all you have to prepare is your car. The total value of your car determines how much money you will be allowed to borrow.

One of the best things about car title loan is that you can continue to use your car while your loan is being paid off. The lender is not after your car. The purpose of your car is to serve as collateral to secure the loan.

Since you are using your car as collateral, you can expect that the interest rate is lower. The lender will be at peace knowing that you will repay the loan within the stipulated period of time because your car is at stake.

Can people with bad credit apply for car title loan?

People with bad credit can take advantage of car title loan. As mentioned above, there is no credit check and the lenders only consider the total value of your car. If your car is still in its perfect condition, then most likely your application will be approved.

Every lender has its own set of requirements, but the most important thing is that you have a car to be used in securing the loan.

What should you watch out for?

Car title loan is a short term loan. You have to repay the total amount within a short period of time. The interest rate is fairly low, but once you extend your payment then the interest rate grows. Car title loan is okay for as long as you will become a responsible borrower. Pay the amount within the stipulated period of time to avoid any financial burdens.

There are so many lenders nowadays offering car title loan. Do not say yes to the first lender you come across. Always check and compare different lenders and choose the one that offers the most favorable rate.

Aside from the interest rate, you should as well consider the types of documents needed and the repayment schemes.  Some borrowers get too excited that they forgot to check other important details. They end up having full of regrets, especially when repaying the loan becomes so much more like a burden.

A thorough research and knowledge about car title loan can save you from so much trouble. Check out online resources and ask referrals from your friends and relatives who have taken car title loan before.

Author Bio

Laura Lewis is a content writer with years of experience writing articles on finance niche. She contributes articles about different types of loans such as home loan, mortgage, home refinancing, payday loan, instant cash loan, and car title loan Fort Lauderdale. She also works as part time consultant in a small financing firm in Texas. 

 

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Category: Loans

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