What You Should Know before Applying for a Car Title Loan
Most of you must have come across the times in your lives when you needed emergency funds. Emergencies sometimes arise because of automobile breakdowns, household equipment failures, late bill payments and the like. Payday loans can help, but they often do not provide the consumer with enough cash. A car title loan is one option for a person who needs more than a few hundred dollars and meets the requirements. A qualified applicant must be 18 years of age and meet the necessary criteria. This Post contains some detailed information about how a general car title loans process works:
What Is a Title Loan?
A title loan is a short-term loan for consumers who own vehicles. A vehicle owner can borrow funds from a title lender based on the value of his or her vehicle. Such flexibility gives a consumer the ability to obtain loans between $500 and $10,000 in most cases. Persons who have newer vehicles can obtain much more than $10,000 if the value of the vehicle is higher.
How the Title Loan Process Works
The title loan process begins with a phone call to a lender that provides it. The lender will collect information about the vehicle such as the year, make and model of it. Next, the lender will provide the prospective borrower of an approximate loan amount based on the information that he or she provides. Someone will have to inspect the vehicle to ensure that it is in working operational condition. The evaluator will look at the vehicle to notate the mileage on it, as well. Finally, the lender will offer the person a loan amount based on his or her findings.
Contracts and Collateral
The lender will create a contract that clearly states the terms of the agreement. The borrower will have to agree to use his or her vehicle as collateral. What that means is that the lender will have the right to repossess the vehicle if the borrower does not repay the advance in a timely fashion. The loan may never get to that point, but the lender will need to know that it has a way to recover its funds if the advance agreement should go sour.
The Benefits of Taking a Title Loan
Many benefits exist to taking a title loan. The main benefit of taking a title loan is that the person can keep the vehicle and drive around even though he or she has a current title loan. The lender does not intend to take the vehicle, it intends to help the borrower get through life.
Also Read: Risks and Benefits of Car Loan
Repaying a Title Loan
The loan repayment deadline can vary a little bit depending on different lenders in different states. For example, in Los Angeles, CA most of the people have to pay back their car title loans about 30 days after they borrow them. The first payment is due at that time. A consumer should contact the title lender immediately upon discovering that he or she will have an issue repaying the advance.
How and Where to Get a Title Loan
To get a title loan an interested person will want to contact a local lender in his area. Many of the car title loan lenders are ready to offer a heavy sum of money for a good vehicle with as much as $50,000 to applicants. An interested person can obtain an approval for an advance within one hour of completing the application. Borrowers can pay their loan early, and they do not have to pay any penalties for doing such.