With any loan you are thinking of taking out, it is important to know the basic facts about the loan type before you commit to anything. Car title loans are similar to most loans in that you borrow money from lender with the expectation that it will be paid back—with interest—over a period of time. But there are some differences between car title loans and other types of loans that are important to consider that will help you to determine what the best options are when money gets tight.
First, you want to compare the different types of loans available to you. For purposes of this post, let’s assume you are looking to take out a title loan on your vehicle. The process is pretty straight forward. You are taking out a short term loan against the value of your car, to get money quickly. If you do a little research, you can find sites like LoanSource.com that will help walk you through the process of applying for a title loan or title pawn.
In general, a car title loan is a small loan that is typically paid back in a short amount of time. In order to apply for a loan, you must own the title to your vehicle and go through a credit check (in most cases, there is also a lender’s fee that is added onto the total cost of the loan). However, if you have bad credit, or no credit, a car title loan can allow you to use your vehicle as credit in order to get approved. The main purpose of these loans is to get borrowers money quickly.
The approval process is typically quick and painless. After filling out the application and consulting with a lender, your vehicle is examined. Upon completion of that examination, the value of the car is compared to the amount requested for the loan. Shortly after, the money is sent to you. While you are still in repayment, the lender has the title of your car. Once the loan is paid off, you get your title back. Occasionally, you might have to give a set of keys as well in the event that you are unable to repay the loan on time.
One of the biggest benefits of these loans is that you are still able to keep your car while in repayment, making the process easy and convenient. On top of that, this type of loan is most helpful because you can use the money for other debts and expenses that you might be struggling with.
If you are not sure whether a car title loan is right for you, take your time to learn more about it before making any decisions. While they are quick and easy to get and provide you the freedom to pay back at your own pace, there are costs and other risks that you should know about. At the same time, as long as you are able to pay back the loan within the agreed timeframe, title loans are typically a safer option than other cash advance loans.
Image Courtesy of: prweb.com