Car Title loans basically refer to a loan facility that is provided against your car title as the security or collateral for the loan. These facilities are in most cases short term and might have a higher interest rate than other loan options, however there are many advantages associated with car title loans.
a.) The time taken to process the loan is very minimal compared to other loans. They can take as a few minutes to a maximum of one day to have the loan approved, giving the borrower the ability rapidly sort out their financial concerns and to regain their financial footing within a short period of time.
b.) Lenders of car title loans do not consider the credit rating or history of the borrower but proceed to issue the loan as long as one has their car title to back it up. What is checked for is the value of the car and probably its condition. No one checks to ensure that the borrower has a regular source of income, this has greatly helped individuals without a payslip to benefit and salvage their financial situations when need arises.
c.) People who are already experiencing cash flow problems or financial difficulties can also benefit from these loans as long as their car title is in order. This makes car title loans very handy and having helped many people move away from financial strains at a point in their life where they could not secure a normal loan, a car title loan ensures that they redeem themselves from difficult situations and achieve stability.
d.) A car title loan is also very flexible considering the amounts of money that can be borrowed range from as low as 100 dollars to as much as 4,000 dollars which does not meet the threshold of most financial institutions that would require you to borrow at least 1,000 dollars even if you need less and on the other hand charge more interest even on the amount you did not require.
e.) In a case where the borrower is unable to repay the car title loan as agreed, they can have the remaining amount rolled over and get another car title loan to offset the balance and start a fresh agreement. However there is a limit to the number of times one can do this.
Some lenders of car title loans might require that the car used as collateral has full insurance and is fully paid for and is not currently being used as collateral for any other loan. The interest rates may also vary from as low as 36% or higher. However these rates vary and depend on many factors including the following main considerations:
- Location of lender and state regulations.
- Terms of payment agreed upon.
- Duration of repayment.
- Amount borrowed.
Car title loans are a good form of loan facilities but should also be taken and used wisely to get the best from them. It is also of paramount importance for the borrower to seek various comparisons of the available lenders which can easily be obtained from seeking online quotes to ensure you get the best deal that makes most sense for your current situation.