Everything You Need to Know About Car Title Loans
Are you looking for a way to get your hands on some quick cash? Do you wonder if you can use your paid-off car to somehow get the cash you need? If so, then you need to learn all that you can about a car title loan.
A car title loan allows you to temporarily trade in your title for some much-needed cash. That way, you don’t have to go down the path of a traditional loan with hefty totals and longer pay-back periods.
See below for an in-depth guide highlighting everything that you need to know about car title loans.
1. You Can Still Use Your Car
There are a few common misconceptions out there about car title loans, and we’re here to set them straight. One of the biggest ones is when people believe that car title loans require you to actually turn in your car to the provider of the loan. That couldn’t be further from the truth.
As the name would imply, a car title loan allows you the chance to some immediate cash by temporarily handing over the title of your car as collateral for the loan. You then have a short period (typically 30 days) to pay back the loan.
Once you pay back the loan, you get your car title back. That process allows for a simple and clearly defined process.
That said, it does nothing to impede your current way of life. Even when the lender has your car title, you’ll still be able to drive and use your car as you usually would.
That’s why so many people love car title loans. They allow you to use something you already have (a car title) to get your hands on the cash you need to pay rent, credit card debt, and so forth.
2. The Application Process is Super Simple
If you have ever had to apply for a traditional loan through a bank or a lender, then you know how painstakingly long they can be. Even after all of that hard work, the lender may still deny your application due to some minor details.
Thankfully, there are other ways to get the cash that you need. A car title loan lender will allow you to get the money without a tedious process.
Most lenders have strategically designed an application process that allows customers to apply online, get the information they need, then get approved. After all, if you need cash right away, the slightest delay could mean it’s too late!
Generally, they involve four simple steps. First, you apply online via the website of the lender you want to apply with. You can then stop by that company’s office to hand over the car title with a valid state-issued driver’s license.
Once you’re approved, the lender will let you know how much cash you qualify for. This is a no-obligation offer, so you don’t have to take it if the amount isn’t what you need.
If you accept the offer, then the lender will organize a way to get you the cash. After that, it’s all about making your payments on time to the lender! It really is as simple as that!
3. You Must Own the Car
This is one thing that is non-negotiable about getting a car title loan. To qualify for a car title loan, you have to actually own the car.
The entire idea of the loan is that you would use the car, which you own, as collateral. This is what gives the lender more guarantee that you intend to pay back the loan. Some may try to give the title of a car they don’t own to get cash and never have to pay it back, which is illegal.
Before you apply for the car title loan, make sure that you have full ownership of the car. If not, then you will have to find some other path for getting cash.
4. The Deadline is 30 Days
This is what people love about car title loans. Not only do they allow you to get cash quickly, but the payback period is incredibly short, so you aren’t bogged down by monthly payments for years on end.
That said, you should know that the payback period is always 30 days. If you don’t pay it back in 30 days, you may lose ownership of your car.
Of course, lenders want to help you succeed as well. Before accepting the cash, make sure you understand the details of paying it back and whether you’re comfortable with the parameters.
5. Know Your Interest Rate
Some of you might be wondering to yourself, “How does the lender benefit from all of this? How do they ensure they make money?”
The lender makes money through the interest rates, which are a bit higher than an average loan due to the shorter pay-off period (30 days).
Interests rates may be as high as 20 to 30-percent, or higher. But some states have a cap on how high the interest rate can go. For example, George state law prohibits lenders from charging interest rates any higher than 36-percent of the total loan amount. Visit this link to learn more about the average title loan interest rate.
Consider Whether a Car Title Loan is Right for You
Now that you have seen an in-depth article highlighting everything you need to know about a car title loan, be sure to use this information wisely.
Take the time to browse our website for more articles on buying a car, going with a new car or used car, and so many more interesting topics.