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Why and when to use title loans

Why and when to use title loans

There are times when you feel short of money and you start to panic. Well, stop worrying since there are ways to get emergency funding by means of applying for a title loan. This type of loan requires that you use the title of your property such as your vehicle as collateral against a particular loan amount that you have borrowed. Since the title of the vehicle is in the possession of the lender, then you can still use your vehicle without any restriction.

Unlike the other conventional types of loans, the title loan is very convenient as you can obtain the loan amount without experiencing any difficulty with the loan officer. In fact, you do not need to carry out a lot of paperwork to borrow the money thus you can get the loan amount within a day compared to other types of loans that require you to wait for several days before you can get the loan amount. Moreover, the benefit of this particular loan is that even if you have a bad credit standing, you can still get a loan as your credit score will not be looked into by the loan officer when you apply for this loan.

Having said this, this particular type of loan is perfect among people who need to have emergency funding. People who require money to pay for hospital bills or to pay for a pressing debt ought to get title loans in order to pay for their debt obligations.

On the other hand, this type of loan is also perfect for people who are borrowing small amounts of money from the lender. In fact, loan companies will only release loan amounts between $500 and $1,500 to the borrower which allows the borrower to be able to afford to pay for the amount on a short span of time. Now what happens if the borrower cannot pay for the amount is that the title of the vehicle or the property will be seized by the lender. Thus, if you borrow this type of loan, it is important that you know your responsibilities as well as pay the amount diligently to avoid seizure of your property.

This type of loan is very convenient but since you are using the title of the vehicle as a collateral, this is the best loan to get if you want to get fast but a not so overwhelming loan amount.

Understanding what car title loans are

Understanding what car title loans are

Vehicles are very important forms of transportation and this is the reason why a lot of people want to buy their own car so that they can easily move from one place to the other. However, procurement of a new car might be stalled especially if you do not have enough budget to pay for one. After all, cars do not come cheap and even if you have gotten a meager funding, you still need to pay for a sizable down payment to be able to purchase the car. Although getting a car sounds too impossible for a person who does not have enough money, this can easily be done if you get a car title loan.

You can apply for car title loans in order for you to be able to buy the vehicle. It is important to take note that the car title loan is different from the other types of loans offered by different companies. What makes it different is that the financier or the lender is listed on the loan title and, by default, has the authority to take the vehicle should you encounter problems such as the inability to pay off your debts or if you are involved in a grave traffic accident.

While it may be risky to get car title loans the fact that there is a chance that you will loose ownership of the vehicle, it is still a convenient option for people who are in dire need for a vehicle but are incapacitated to pay the full amount of the car.

When you apply for a car title loan, the first thing that will be looked into is your credit score. If you have a good credit score, then expect that you will have to pay a lower rate compared to an individual who has suffered from a bad credit score for a long time. Thus if you want to apply for this type of car loan, make sure that your credit is spotless so that you won’t have to burden yourself from paying a very high rate for your loan. Another thing that will also affect the rate of your car title loan is the term. If you do not have a lot of budget to pay for the loan, then you ought to get a longer term which allows you to extend the payment terms but you only pay for the amount that you can handle.

There are a lot of car loans that you can choose from and learning about auto title loans will somehow increase your options in achieving the car that you want.

The dangers of using title loans

The dangers of using title loans

Debt is an inescapable fact in our lives and as we grow older, we end up having a lot of debts that we have a difficult time paying. There are a lot of ways that we can pay for our debts. A good way to pay debts is to get title loans. Title loans allows you to easily purchase the car that you want to buy by using vehicles as collaterals for the loan should you become incapacitated to the pay for the loan. This is the best way to get the funding without the need to see a bank loan officer. This is the reason why a lot of people prefer this particular type of loan.

While title loans are very helpful for people who want to acquire a particular property but do not have a lot of money to pay for it, it still comes with some repercussions. Perhaps the most common danger of using a title loan is the fact that it imposes high interest to the borrower compared to other types of loans. Moreover, title loans also require the borrower to repay the loan within a month when the loan was first obtained from the lender.

Another danger of getting title loan is that your collateral has a bigger value compared to the amount that you have borrowed. For instance, if you were allowed to borrow $1,500 and were not able to pay within a month’s time, then your car which is worth more than $1,500 will be seized by the lender the fact that you were unable to pay for the debt. Due this disadvantage, you may be better off selling your car than using it as collateral for a title loan. However, if you do not want to sell your car to raise funds, then it is important that you are responsible enough to pay for your dues diligently otherwise risk loosing your car to the lender.

To ensure loan repayment, the lender usually requires the borrower to have a stable job before the loan application will be approved. However, the problem with today is that there are a lot of people who have lost their jobs and getting a title loan will be impossible if they cannot show proofs about having a stable job.

What’s worst with this particular type of loan is that if you cannot pay, not only will your collateral be seized but you will also end up paying high bank fees and even higher interest rates. Thus, it is very important that you ponder on first if you really want to get this particular loan.

How title loans work

How title loans work

Different people have different opinions regarding title loans. However, majority of those who have experienced getting title loans know that title loans are very helpful the fact that you can get the loan amount immediately and without too much fuss. In fact, this is one of the best ways for you to get a loan within one day and you do not need to worry about having a good credit score since this loan does not look into these matters. When making loans, it is important that you know how title loans work. The problem with not knowing what loans are is that you may end up suffering the consequences.

This particular type of loan requires that you place a title of a property that you have (car, boat or real estate) and use it as a collateral to get a loan. The lender will be the one to hold the title of your property until you fail to pay for the loan. However, the loan amount is less than the value of the title of the property that you have thus if you fail to pay the amount that you have borrowed, you will end up giving away the ownership of your property to raise the fund that will allow you to pay for your car. In fact, you will only be able to get a loan amount that is about 30% to 50% of the original amount of the car.

Title loans have loan periods that are less than 60 days so you have at most 30 days to pay up your loan. Moreover, title loans do not follow the usual restrictions as with other types of loans thus the interest can be extremely high compared to other loans. The interest charge can vary from one lender to the other and the charges can be between 100% and 350%. Having said this, it is important that you pay for the loan amount within a month including the amount of the compounded interest before you will be able to get back your title.

Thus if you want to apply for this loan just for the sake of getting the money that you need for emergency expenses, you need to make sure that you are capable of paying for it in such a limited span of time. Otherwise, you will loose ownership of your car for a loan amount that does not even equate to the original value of your property.