Understanding How To Obtain A Loan With A Car TitleFast Action Finance
It is quite possible to obtain some financial help using your car title as collateral. However, reputable lenders offering this form of short term financial assistance recommend that you give much thought to your decision to apply for a car title loan and for a good reason. This form of a financial assistance does not suit some people and tend to be quite risky for them. As such, one really needs to think about it beforehand and try to understand the product before applying for it or committing his or her car to it. Failure to do so has serious consequences, one of them being the likely loss of your car if for one reason or another, you are unable to meet the high interest payments on the availed loan.
What really is a car title loan?
A car title loan is a kind of a short term financial assistance that has very high interest rates on which a car title is used as a security against the wanted cash amounts. Once the needed amount of money is availed, the borrower is required to repay it within a stipulated duration of time. And like other secured loans, you risk your asset, in this case your car being repossessed if the set payments arenâ€™t met.
Who can apply for car title loans?
People who use car title loans in real sense are car owners and possess car titles that are used as security against the borrowed amount of money. The auto must be fully paid for before it can be used for securing a car title loan.
Car title loans are often applied for to cover emergency funding and are short-term in nature. However, longer term car title loans are increasingly being offered these days if requested for. These come with a choice of repaying the interest only or the principal and interest together when due. If an interest only title loan is offered, then it tends to be shorter term, for example has to be repaid within ninety days. If timely interest payments on this are made, then the lender can extend the repayment duration to make things a little bit easier for the borrower. However, the full value of the loan is still owed, all making this option quite costly in the long run.
If the principal amount and the interest are amortized, then a longer repayment term can be arranged, however, the borrower has to be very careful not to default as the penalties can be quite stiff. Whichever option you opt for, be careful that no pre-payment penalties apply, i.e. just in case you are able to repay your loan off earlier than was estimated.
Car title loan application
You can either apply for a car title loan online or offline. Online application is more popular as it is time saving and hassle free among other things. With car title loans, there is normally no credit check, meaning that people with bad credit scores can apply and still be approved. Regardless of a borrowerâ€™s credit status, the following are required:
â€˘ Possession of an auto title
â€˘ Proof of income
â€˘ Verifiable identification
â€˘ Residence proof
â€˘ Auto insurance proof
All in all, having met all the prerequisites of the loan, the money is deposited into a borrowerâ€™s account within no time for whichever the purpose.