5 Facts about Car Title Loans You Need to Know

title loans

There are many ways to buy things. If you’re flush with money, you can hand over a wad of cash. Unfortunately, most people can’t afford to make expensive purchases very often. If you don’t have cash, you could use a credit card, apply for store credit, or take out a bank loan, but if your credit file is less than stellar, these might not be an option for you.

Another way to finance an expensive purchase is to use an existing asset as collateral. You may be aware that your property (if you own it) can be used as collateral, but did you know you can also use your car to finance a purchase?

Car Title Loans are Quick and Easy

Vehicle title loans are a quick way to secure money to purchase anything at all. You can also use the cash to pay a bill if you need to. How it works is simple. You hand over your car title to the loan company and they give you the cash. The loan company keeps the car title until you pay off your loan. So long as you don’t default on the repayments, you won’t have a problem. However, if you can’t meet the repayment schedule, you will lose ownership of your vehicle.

You Can Get a Title Loan with Bad Credit

You don’t need a perfect credit rating to be eligible for a car title loan, which is why they are a useful short-term loan option. Most lenders will consider your application even if you have a poor credit history. Since you are handing over your car title, there is no risk to the lender.

Title Loans are not Available in All States

The title loan industry is heavily regulated to protect consumers. Each state has its own regulations and some states don’t allow lenders to offer this type of loan. Check online to see whether your home state allows car title loans.

Car Title Loans are Not Bad!

Short-term loans have acquired a lot of bad press, mostly due to unscrupulous lenders charging extortionate interest rates to vulnerable customers and adopting strong-arm tactics when the customer can’t make their repayments. Of course, if you borrow money from a back-street lender, it will probably end in tears. For a hassle-free experience, look for a reputable lender with a good reputation, preferably one that is regulated by the appropriate authority. You can search online using the phrase “title loans near me”, which should throw up a selection of lenders nearby.

Make Sure You Can Afford a Loan

Hot on the heels of the last point, it is vital that you make sure in advance of borrowing money that you can afford the repayments. Take a good, hard look at your income and outgoings. Draw up a monthly budget and see how much disposable income you have. Your loan repayments will be deducted from your disposable income, so check that it doesn’t leave you overly exposed in the event of an unexpected bill.

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