Is It Worth It?: The Top Benefits of Car Title Loans
Do you struggle to get a traditional personal loan from a bank? Maybe you made some mistakes with your credit. Perhaps, like an increasing number of people in Ontario, you work in the gig economy and don’t earn a regular wage.
The conventional banking system isn’t a one-size-fits-all option that covers people in all circumstances. That’s why other types of credit continue to pop up: to serve those who the banks leave behind.
Auto title loans are one of those lending opportunities. With a car title loan, you borrow against the value of your car. Is an auto title loan worth it? Keep reading to find out if it could help you get cash fast.
What Are the Benefits of an Auto Title Loan?
Auto title loans(or car title loans) offer a chance to get cash quickly. Unlike other forms of credit, they don’t require long applications or underwriting. An application takes ten minutes, and lenders provide the cash on the same day (or next day).
A second benefit of the auto title loan is that it allows you to work with what you have today rather than what you aspire to have later. Building credit is a long process, but owning a car is much easier. Whether you own a car, truck, SUV, or even a motorcycle, you can borrow by using your vehicle’s title. The title (along with proof of income) is all you need. No aspirational credit scores are required.
There’s no credit check involved at all. You can borrow against the following vehicles as long as you own them free and clear:
Car title loans are also more forgiving than a cash advance. Because the loan provider has a car as collateral, there’s less risk, which means interest rates and fees are often lower. The repayment options are also made apparent upfront, so you always know what you need to pay and when.
An auto title loan might sound too good to be true, but it gets better. While you do have to pledge your vehicle as collateral until you pay the loan back, you keep your car for the loan period. You can go where you want when you want.
Ultimately, what makes a car title loan worth is stress relief. You can get cash quickly without worrying about the fees and interest rates that trap people in debt with payday loans. Borrow what you need, pay it back (plus interest), and call it done - all without damage to your credit.
Make It Worth It: Enter an Auto Title Loan with Your Eyes Open
There are real benefits to an auto title loan compared to payday loans, cash advances, and even traditional lending.
However, as with any form of borrowing, auto title loans work best when you are aware of the terms and expectations.
Most auto title loans are for small amounts of money, which you borrow over one year, (maybe for longer or shorter periods too). In the end the total cost to you for an auto title loan is much less than what you would experience under other types of loan arrangements.
To make the most of the loan, it is important to only borrow as much as you can afford to payback within the term of the loan. That means avoiding borrowing excessive amounts.
When you borrow too much, you increase the likelihood that you might need an extension. Extending auto title loans is always possible, but why not avoid doing this? As your debt grows, you become less likely to be able to pay it back. It can spiral out of control and cause unnecessary worries.
How to Make Sure You’re Ready for a Car Title Loan
Is a car title loan right for you? The answer to that question lies not only in your finances but also in your ability to hunt down the right loan.
Before you sign the dotted line, you always need to talk to the title loan lender to feel them out and assure yourself that they are the right people to deal with, that they will understand your position should you run into problems, and be willing to help you out more further down the road.
You should know every detail before you jump into it headfirst.
Additionally, work with lenders who work within the traditional title loan parameters: short-term loans with reasonable repayment terms.
Don’t fall for the low monthly payment promise; you may pay a low sum every month, but in the end, you pay back exponentially more than you borrow. Typically you should be able to borrow about50 percentof your vehicle's Black Book value.
Finally, consider adding a co-signer to your loan. Your co-signer improves your likelihood of approval if your assets are minimal, and they are also one more layer between you and the lender in case something goes wrong. Make sure your co-signer knows the terms exactly and understands that they must also own a vehicle that meets lending criteria.
How Will a Title Loan Help You?
A car title loan can help you out of a tough spot without the interest rates of a payday lender or the strict requirements of a conventional bank. When you use a car title loan, it is important to understand that you get out of it what you put into it. Borrowing sensibly and learning the payment terms before you apply can prevent your debt from becoming unmanageable.
Do you need some extra cash but don't qualify for credit elsewhere? We can help. Click hereto learn about our eLoan process and learn how you can get up to $25,000 on the value of your car today. With the eLoan, there is no need to drive to the lender’s physical office, but rather can apply for the loan and receive it from an offsite location.
What Is a Collateral Loan?There are many, many different ways to get a loan out there. The most common situation for loan seekers is to go to their bank. Banks and other financial institutions weigh the amount of risk when lending money to people. A strong credit score from an individual gives the moneylender more confidence that they'll see the money they lend back on time with interest. If you don't have a strong credit score, you might need to take other steps to help money lenders feel confident in your case and lessen their amount of risk. Borrowing money without any type of collateral is known as an unsecured loan, while a collateral loan is known as a secured loan. Individuals can offer any type of property with high value as collateral for their loan. Vehicles, whether higher end or collectors/classic, construction equipment and other such high-value assets can help to secure money when you need it. How does it work? Your collateral lessens the risk of the lender. You let the lender hold the collateral during the term of the loan and get it back once the loan has been paid in full. If you fail to pay back the loan, or make any alternative arrangements, the lender can sell the asset that you've offered as collateral. That means in extremely rare cases failure to pay means you may lose your pledged collateral. The lender will then sell the asset for the highest amount possible and use the proceeds to repay the loan, and give you any amount received that is higher than what is owed. You also need to outright own these assets in order to borrow against them. But as long as you own a high-value asset, you can obtain a collateral loan. Assets should be easy to liquidate to count as a form of collateral. Vehicles, classic/collector vehicles, construction equipment are a great examples, while a rare china set may be less likely to be approved. If you need money fast, there's no more efficient way to get it than¬†a collateral loan.
Advantages of Collateral LoansThere are a number of reasons that individuals attempt to borrow against their vehicles, equipment or other assets. The main reason is that you have a much higher chance of being approved when you apply for a collateral loan as compared to a traditional, unsecured one. If you need money fast, you might not have time to go through the application and waiting process for an unsecured loan, especially if you might just get rejected at the end of it all. Since you're reducing the lender's sense of risk, you might also be able to secure a larger loan than you would if you were applying for an unsecured loan. Depending on how much money you need to borrow, this can be a huge advantage. If your money is tied up in various hard-to-sell assets, borrowing against them can help you get liquid fast. Selling your car for cash, for example, can take a great deal of time and effort. Borrowing against it can get you the money you need at a much quicker pace. Collateral loans also offer a great alternative to less-than-preferable forms of borrowing money. No one wants to have to¬†ask friends and family members¬†for money, but many feel as if they have to take this step after being turned away by traditional banking institutions. There is a higher risk associated with collateral loans. But if you feel confident that you can pay back the money borrowed, they offer a perfect and convenient alternative to other lengthy and restrictive processes. You can find a collateral loan lender that can work for you to create an arrangement that works for both of you.
How to Secure Collateral LoansIf you have a car title or other asset ready to borrow against, what is your next step? There are a variety of money lenders who accept collateral offers in exchange for loans. National banks and community banks will both offer such loans. If you're already a member of a bank, you may prefer the familiarity and convenience of visiting your local branch. That being said, many people avoid going through banks because of the long wait times and restrictive business hours. If you need money fast, going through a bank can delay the process. There are many online money lenders that accept collateral loans. With these lenders, you can apply online from the comfort of your own home. An online application usually only takes half an hour to complete and you can be approved at a much faster rate than that of a traditional bank.
Your Car Title as a Collateral LoanNeed money fast and want to borrow against your vehicle? The above information should give you the basics on what you need to know about obtaining a collateral loan. Have more questions?¬†Give us a call¬†and let us help.
Using your car as a collateral to get a loan is sometimes the best option you have. A car title loan can be your savior when you need money urgently. But just like any other loan, payment can be easier and faster if you follow the right loan management tips.
Have you taken a car title loan or are thinking about getting one? Here’re six ways to help you manage and pay your loan without suffering financial distress.
Round Up Your Payment Amount
You should round up your scheduled payments to the nearest $10, $20, $50, or even more. It’s a subtle way of paying more without feeling like you’re paying extra. If you were to pay $215, you can decide to pay $250, which is an extra $35 per month.
After 12 months, you’ll have paid $420 more, which is almost two additional payments. It means every year you’ll be knocking almost two months’ payment off your payment duration. You end up finishing paying your car title loan earlier than expected and free yourself from debt.
With that motivation, you don’t have to stick to one payment roundup. You can keep on bumping up your payment to a bigger number, which will translate to a significant cut down on interest and earlier loan repayment. Since after a predetermined amount of time, typically six months, there’s no penalty for paying your loans earlier, there’s no need to wait for the entire loan duration to finish up payment.
Avoid Missing Payments
Missing a payment is one of the biggest mistakes to avoid while paying your loans. It’s going to hurt you financially. It makes you fall behind on your scheduled payments, can subject you to penalties, and you'll be paying more if the loan is extended because of any missed payments.
The more you default, the more you may sink your credit score to the point it will be difficult to access loans from most lenders in the future.
If you are on the verge of missing your payment, consider cutting down on other monthly expenses such as eating out, fuel, and entertainment to save the situation until you get back on your feet. Also, most title loan lenders are reasonable and will move a payment if you call and ask.
Pay More Often
Instead of the monthly payment schedule, you can split the monthly payment and make payments every two weeks or even weekly. For example, if you’re paying $200 every month, you can instead, pay $100 every two weeks, or $50 every week.
If you pay $200 monthly, in a year you would have paid $2400. But if you pay $50 weekly, by the end of the year (after 52 weeks), you would’ve paid $2600, which is $200 extra every year. And you’ll be saving on interest and paying your loans in a shorter time, without much struggle.
Therefore, arrange with your lender or enquire about the possibility of paying your loans weekly or biweekly.
Make One Extra Payment
Sometimes you don’t have the money to commit to a weekly or biweekly payments. That shouldn’t worry you. You can make one extra payment every year and still get the same results.
You can save some money equivalent to or more than your monthly payment and pay it off at the end of the year. If you pay $250 monthly, you can look for an extra $250 or more and pay it in any month or at the end of the year. Use your bonuses from work, tips, or tax refunds for the payment.
The advantage of this method is that you have a whole year to look for the extra amount to pay. It’s favorable even to those who are struggling financially. Again, don’t limit yourself to one extra payment.
You can make several extra payments in a year if you have the opportunity to do so.
Get an Extra Source of Income
If you can find a way of making more money than you already have, it will get easier to pay your loans. Use the extra income as an extra payment to your car title loans. If you make $30 monthly in your side hustle, that’s an extra $360 of your loan payment every year.
Again, in the event of an emergency, the extra income can come in handy as you would use it to repay your car title loan. The extra income will save you from defaulting in times when you’re financially down.
With the additional source of income, you can combine all the above-listed methods to not only pay lower interests but also complete your car loan repayment earlier.
There’re many ways of making the extra income: you can rent your car, use it as a cab, sell DIY crafts, take up online jobs, supply products, and much more.
Refinance and Renegotiate With Your Lender
Car refinancing is where you revise the payment rates, payment schedule, and terms of the previous credit agreement. It involves the reevaluation of your credit terms and credit status. If you succeed, you'll be paying less interest in your subsequent loan repayments.
Thus, it creates a pathway to repay your loan faster. Refinancing is a good option if your new interest rates are lower than the current interest rates and the total saving amount outweighs the refinancing costs.
When you’re in deep financial trouble and paying the current title loan becomes difficult, you can consider getting help from your lender to ease the repayment. Your lender may understand your situation and renegotiate a new deal that can work for you.
Rather than defaulting your car title loan repayment and facing the consequences, discuss with your lender on the way forward.
Why You Should Pay Your Car Title Loan on Time
Apart from saving on interests and reducing the overall term of the loan, you will save a lot of money in the long run if you pay the loan faster. There’re many things you can do with the savings. These include:
- Start a new business
- Boost your existing business
- Save for your retirement
- Repay other debts
- Cater to the household or personal needs
- Travel or pick up a hobby
What's more, you'll save yourself from the stress and anxiety that comes with paying loans and defaulting due to unforeseen circumstances.
Are You Looking for a Car Title Loan?
Coming up with a title loan management strategy enables you to repay loans fast, on time, and with favourable interest rates.
Are you looking for a car title loan? You don't have to be employed or have a high credit rating to get one. Contact us today for a fast and secure car title loan.
How to Value Your Car for a Title Loan
Everyone gets in a jam from time to time. Whether it's a traffic jam or a financial jam, we may feel stuck and impatient for answers.
Financial jams are even harder to navigate at times. As we've been told since we were kids, "money doesn't grow on trees." So, when hard financial times hit, we may be at a loss on how to correct the situation.
Getting an auto title loan is one solution you can explore. Auto title loans have no relationship to auto car loans. Although, an active auto loan may affect your ability to get approved for an auto title loan.
Auto title loans can be secured online, at title lender's storefront, or sometimes at a bank or credit union. These loans take the value of your car and offer you a short-term loan. In return for the loan, the lender will place a lien against your vehicle as collateral.
It's worth noting that auto title loans aren't for everyone. They are typically short-term loans that require repayment over a shorter period than a mortgage of a bank’s term loan. They are generally used for emergency situations and not typically for entertainment or other frivolous purchases.
Want to learn what your car is worth for an auto title loan? Read on to find out.
Auto Title Loan: What's My Car's Value?
Auto title loans help people to get back on their feet when they need financial assistance. These loans, like any other loan, need to be taken seriously. While they are often easy to obtain, they must be paid back like other financial responsibilities.
Before you determine if an auto title loan is right for you, ask the title loan lender what repayment schedules are available and match the options to the one that best matches your needs and financial abilities. While most of us prefer to pay back a loan as soon as possible, if this is not what is best for you, then make sure that it is structured so the what you have promised the lender is what you can afford. Many title loan lenders will allow you to renew your loan, with or without getting new funds if the original payment structure is not working for you, but it is better to set it up correctly in the first place so you can keep your obligations for repayment from the beginning.
If you do want to get an auto title loan, then it's imperative that you find a quality lender. Find a lender with great customer service, that values transparency, and is willing to explain their processes in detail to you.
Before you speak with any lender, you may be wondering exactly what your car or vehicle is worth. Explore the following ways to determine the value of your car for an auto title loan.
1. Canadian Black Book
Canadian Black Bookis a great tool for determining the value of your vehicle. To use it, you can first start by going to the Canadian Black Book website.
From there, you can put in your car's make, model, and year. You can also add in any features which may increase or decrease the value of your car.
Using Canadian Black Book gives you an objective estimate of what your car is worth. But, keep in mind that this doesn't guarantee how much a title loan company will give you for your vehicle. In fact, auto title loan companies tend to offer 25% to 50% of the car's value.
Canadian Black Book will give a starting place to determine how much you can receive on a title loan. This will help you to negotiate with auto title lenders. It will also help you to choose the best auto title loan lender to meet your needs.
The equity you have in your car can play a major role in how much the auto title loan company considers it be worth. Many companies require that you own your car outright. However, some companies may take into account the value of the car and the equity you currently have in the vehicle.
The more equity you have, the more money you can receive from an auto title loan. However, if you currently do not own your car outright, you should thoroughly consider whether or not an auto title loan is a good idea. If you get an auto title loan while paying off an auto loan, you will have two repayment schedules to manage.
This could lead to a mound of debt that will require servicing that could cause you to neglect other bills as they come due.
3. Government Restrictions
Each province and country have rules and regulations that affect auto title loans. Canadian provinces do not set any minimum and maximum amounts that a potential customer can borrow on auto title loans. However, you can expect the auto title lender to lend based on their determination of your vehicle’s value.
Research your vehicle’s value to get a good idea of what the auto title lender will lend based on your vehicle’s value.
4. Appraisal Procedures
Each auto title loan lender has different appraisal procedures. These procedures may value your vehicle at more or less of what Canadian Black Book values it at.
Furthermore, some auto title loan companies will only offer you a loan based on the trade-in value. The trade-in value of your vehicle is the amount of money a dealership would give you if you traded in your car for a new one. Typically, the trade-in value is less than the Canadian Black Book value.
Speak with an auto title loan company directly to learn more about their appraisal procedures and policies.
Auto Title Loan: Is it Right for You?
An auto title loan needs to be thought through before signing the dotted line. If you default on the loan the lender does not necessarily immediately seize your vehicle for non-payment as they are in the business of making money on interest, not grabbing a vehicle and selling them. However, bear in mind that because your vehicle is being used collateral the lender could take it to pay off the loan should you completely refuse to make any payments nor return their calls.
We all need our vehicles to complete everyday tasks. We also need them to make money at a job and take care of our children. This is why it's very important to think this decision through and to not make it impulsively.
However, in life, the unexpected can easily occur. Last minute, we may receive a repair or utility bill we can't pay. In these instances, auto title loans can help.
If you do feel confident in your ability to repay an auto title loan, then it can relieve your financial stress immensely. It can help you to get back on your feet when the unexpected occurs. Many title loan lenders do not require you to have an income, but rather just equity in your vehicle. This means that you will be able to qualify for a title loan even if you are not currently working. If you are not working the amount that you receive will most probably be less than if you are working, but you will still qualify for a loan of some amount if there is ample equity in the vehicle.
Interested in getting an auto title loan online?Check out our eLoan processand apply today.