Car Title Loans: The Best Solution For Fast CashFast Action Finance
If you need money fast and may have a bad credit score which keeps you from accessing traditional type of short-term loans then you should know that car title loans are one possible solution for you. Choosing a car title loan is one of the ways in which you can manage to get some fast cash without being required to go through income verification and credit checks. Although it sounds really straightforward, this type of loan can lead those who decide to borrow themselves deeper into debt and remain without a car when extreme situations occur.
How a car title loan works
If you want to get a better understanding of how a car title loan works you should just imagine that you have taken valuables from a pawn shop and an employee behind the counter would highly appraise your valuable items and gave you a loan based on the estimated value of your loan. It all comes to what your valuables are considered to be worth when it comes to being offered a loan based on charges interest. All you have to do is pay back the money within the agreed period of time so as not to forfeit your valuable items. The same way happens in the case of a car title loan.
More about car title loans
In the case of a car title loan, the lending company is the one that evaluates the value of your car. The way in which it does that is by basing its estimation on wholesale values and then offer you a loan based on the estimated value of your car. Afterwards, the lending company holds on to the title of your car until you manage to repay your loan. It is not the same thing as buying a car. It is a short-term type of loan which features a hefty interest rate. In case you do not manage to pay back the money within an established time frame with the established interest then you will lose the car. It will be considered that you have sold the car to the lending company by default.
What you need to qualify
First of all, it is important to consider the fact that a car title loan is based on the equity that the owner has managed to build up in the car. This will give you a better understanding of what is required to qualify for it. In the case of most lending companies you will be required to own your car outright. In the situation when you still owe money on your car loan, the title of your car will remain in the hands of the bank. This will make it impossible for you to use it as a loan collateral. Other important requirements in the case of the car title loan are the proof of your residence, the minimum age required for application and certainly the proof of your income. These requirements all differ according to what each blending company establishes in the case of car title loans.
Be aware of legal aspects
A very important aspect involved in driving your car to the company that offers you the money you need for the title of your car is a simple thing to do but you still need to be aware of important legal aspects involved in this process. You should never just give the title loan a green light if you have not previously been informed about all the important aspects involved in the transaction. You must always be aware of what you are legally committing to so as not to encounter problems in the future and not be able to deal with them.
Important aspects to consider
The interest and the way in which it is calculated is very important as well as the time period for which this rate is calculated. This is why you have to be familiar with such aspects before actually signing any legal documents. Another important aspect to consider is how penalties are considered in the case of late payments or non-payments. You might encounter a similar situation and you should be aware of the way in which these situations will affect you from a financial and legal point of view. You should know which might be the highest risks involved in such situations and whether you might even get to lose your car in case you cannot pay your rate in a certain month or can only pay it later than on the established date.
The same as in the case of any other loan, car title loans are very important to be carefully analyzed from all possible perspectives before actually agreeing with a certain offer. You must evaluate your alternatives properly before going for one offer and acquire the money you need.