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.