Questions You Should Ask When Securing A Title LoanFast Action Finance SEO
There are many ways in which you can obtain a loan in Canada, from payday loans, to personal loans, to secure loans. There is one option wherein you can secure the loan against any of your paid-off vehicles – from cars and trailers to RVs and even watercraft. Other assets can also be used as collateral. This is otherwise known as title loan. Here are questions to ask in case you are interested in obtaining this type of loan.
How does a title loan work?
Title loans work the same way as regular installment loans. You are given a sum of money and are expected to pay this off with easy and manageable payments. You have to remember though that a title loan is secured against your vehicle. The lender will require that a lien be placed on your vehicle upon signing of the loan contract. This is their security against the loan and the lien will be removed once the loan has been paid off. Since the loan is secured with your vehicle, you can obtain a rate lower than those commonly used for unsecured personal loans. This is because the lenders have a physical asset, such as your car, to back up the loan. Although the loan is secured against your vehicle, you can continue to drive it as usual.
What if I have a low credit score?
Persons with bad credit will have an easier way obtaining a title loan than when they opt to obtain unsecured personal loans. If you are one of those individuals with a low credit score, title loans are the best solution to your financial problems. After all, the loan is secured with your vehicle so your credit score should have little to no impact on your loan application. In fact, majority of lenders do not even check your credit score when it comes to title loans.
How do I apply for a title loan?
Many find that the easiest way to apply for a title loan is online. You simply have to fill out an online title loan application form. This basically contains a few questions about your personal information, such as name and phone number, as well as basic questions about your vehicle. From here, the loan representative will contact you via phone or email and will ask you further questions to determine how much money you are eligible to receive. You will also have a chance to vocalize any questions or concerns that you may have to the loan representative. After this conversation, you can then decide if you would like to proceed with the loan.
How much is the maximum loanable amount?
It will depend on the current value of your car or the asset that you are using as collateral. The value of the asset is basically determined using standard information like the car’s make, model, and kilometers on the vehicle. The car’s engine size and overall condition will also be considered. Any installations or additions made to the car like a sunroof or leather seats will also be part of the computation. Make sure you inform the service provider about all these things to maximize the amount you can loan from them.
Other questions you may have
- What if the title is in someone else’s name? You have to ask the said person to co-sign the loan.
- When will the lien be removed from the vehicle? The title will be released once you have paid off the total amount you have loaned.
- Will you be allowed to get a cumulative amount of loan for two cars? You are may be able to take out two separate loans under two separate vehicles. To maximize the funds you can receive, tell the lender about all major assets.
There may be other questions you have in mind when it comes to a Toronto title loan. Please feel free to raise your concerns right before signing any documents or receiving the money from the lender.