Debunking Six Myths About Car Title LoansFast Action Finance
Wondering what is a car title loan? Well, it is a type of secured loan where a borrowerâ€™s car title becomes collateral. It is a short-term loan that can really come in handy whenever one needs a huge amount of dough right away. You might hear a number of myths which revolve around this type of loan. Here are those myths:
The lender takes away the vehicle
When a person hears about a car title loan for the first time, there is always the tendency for him to think that the vehicle will be taken by the lender. Since the hard copy of a car title would be taken, would not the lender take the car as well? But the truth is that the lender only takes the car title and nothing else. The borrower will be able to keep his car and use it as he pleases. All he needs to do is pay off his debt so that his vehicle will not be repossessed.
The application process is hard
Because this type of loan is new to the ears of a lot of people, it is easy for them to think that the application process is very hard. But the truth is that the application process is very easy. When it comes to car title loans, the approval rate is quite high. It is also not that difficult to look for a company that offers car title loans. One can use the phone directory or the Internet.
One needs to have good credit
There is also the myth that one needs to have good credit in order to enjoy the benefits of a car title loan. After all, most loan options really check if the person has a good credit or not. But the same is not true with car title loans. One can easily access cash even with bad credit.
It takes a long time before you get your money
Some people think that it would take a long time before they get the money that they need. But with car title loans, one can easily get his money. The amount of time a person has to wait varies from one company to another. However, there are instances when people could get their cash in just an hour or a day.
You have to borrow a lot of money
In most quick loans, people have to borrow a huge sum of money sometimes ranging from five thousand to ten thousand dollars. This could be more than what most people need. With car title loans, people do not have to borrow a huge sum of cash. Usually, car title loans do not exceed five thousand dollars.
The interest rates are high
Finally, a lot of people think that that the interest rates for these loans are high. It is true that interest rates are higher than most loan options. After all, in this option, one can get quick cash. But this does not mean that the interest rates are very hard to pay for. In fact, car title loans are cheaper than regular payday loans because of their secured nature.