Understanding Auto Title Loan TermsFast Action Finance SEO
Most people find themselves in a position where they need cash urgently to sort immediate needs and they donâ€™t have the amount needed. One way to acquire quick funds is to borrow with your car. This type of loan is known as an auto title loan or a car title loan. Your credit can be good or bad, or you can be unemployed or self-employed, and still be eligible for a car title loan. This is because your car is used as security for the loan. Although it is used to secure the loan, you can still continue to use your car as usual.
All you need to apply for an auto title loan is an ID, insurance and a lien-free car. Once you get the loan from the lender, you still continue to use your car as you repay your loan. How much you can borrow depends on the overall value of your car. If you are a first time borrower, there are some auto title loan terms that you need to familiarize yourself with before you start comparing different offers from different lending companies. Common loan terms you will encounter include:
This term refers to the time you are supposed to pay back the loan. Unlike traditional loans, car title loans have a shorter loan term. This is why it is very important to apply for a car title loan only when you need cash for emergency expenses. There are lenders who are flexible and willing to negotiate the loan term with their customers in order to allow them to pay back the loan without too much pressure. Some individuals opt for a shorter loan term in order to pay back the loan as quick as possible and get it off their back. However, some individuals opt for a longer loan term in order to keep the payments smaller.
Some lending companies require their customers to take add-ons in order for them to qualify for a loan. Add-ons may include you to have breakdown insurance on top of the normal car insurance. Why is this? As mentioned earlier, the value of your car determines the loan you can apply for. In case of an accident, whether major or minor, the value of the car definitely goes down. If you have a breakdown insurance cover, even if you get into an accident, the lender is assured that they will recover their whole amount in the event you are unable to pay your loan. Different lenders require different add-ons. So, it is important to find out about what add-ons may be required by the lender of your choice. At Fast Action Finance, no add-ons are needed. The only insurance required is full-coverage car insurance.
Sometimes circumstances change and one is faced with emergency expenses. This is something that can affect anyone at any time. In the event you are unable to make your monthly loan repayments, you can talk to a lender to negotiate your terms of repayment. Lenders do give borrowers the option to make interest-only payments. This option allows borrowers to pay only the interest on their loans until they come up with the cash to repay the loan. The only downside to this agreement is that one ends up paying a bit more interest on their loans than they initially expected.
Just like any other type of loan, a borrower has to sign an agreement with the lender when applying for a car title loan. Once all the necessary documents are signed and dated, the lender will place a lien on your vehicle. The lien is registered with the Ministry of Transportation and lets other lenders know that there is money owing against your car. The lien also secures the car as collateral for the loan.Â Once the loan is has been paid off, the lien will be removed immediately.