Understanding The Pros And Cons Of Car Title Loans As An Option For Getting Fast CashFast Action Finance
If you need money fast, even if your credit scores are not too good, you can consider taking out a car title loan as one of your options. This is one way to receive fast bucks without any checks on your credit records and with little confirmation on your income status. Although this is a rather known fact, many people are still not too aware about car title loans. Car title loans, albeit useful for users, are very risky as a business for money lenders. Money can be lent out even without a car in actual fact, and lenders might burrow deeper into debt because of that. For that fact, car title loans sometimes come with a high interest rate, to balance out that risk involved.
How does a car title loan work?
It is basically the same mechanism as a pawn shop. You get your items into a pawn shop and the pawn shop employee weighs your items and checks the quality and gives you an amount of money that is the worth of the items you have pawned. For car title loans, the method is somewhat the same. You apply for a loan with your car as an assurance and security, and you basically get an amount which is the resale value of the car. Now letâ€™s discuss bout the good and bad parts about having a car title loan.
There are rates reasonable to auto title loans
In comparison to other options for loan, car title loans offer good rates and very malleable terms and conditions. This is because the loaners have some form of security with the car left as assurance. Such that if you donâ€™t pay back your own, it can still be taken that the loaners can claim back their money and even slightly more by using your car and selling it. Car title loans also have a longer window, grace period before the period of repayment begins. This way it forms as the best option when you are thinking about rebuilding credit.
There is a misconception that causes people to be geared towards lenders with high interest rates in particular. The misconception is that only those with good credit records are able to get lower interest rates from car title loans. This is not true because usually credit record is not a testing factor or a requirement before you land yourself with a car title loan. So just apply online to any car title loan providers in your location, and do not fear about your credit records whether they are perfect or not!
The time taken to land up with a car title loan is very little
Most of us need the money urgently when we consider taking car title loans, and these loans do justice to that reason. The application of car title loans can be done online or can be done with a phone call or by going down to the loan providers personally. Minimal documentation is required and those documents are usually things that you already hold, for example your car insurance and your personal identification. Besides these, you would just need to fill up a simple form and then submit it. The processing time of a car title loan is about an hour. Just note that banks or traditional money lending places take a longer time to process the loans and give an approval. Perhaps, finding a non traditional hub for money lending might be useful because they tend to approve car title loans almost right away!
But what can go wrong with these car title loans?
One of the things that can go wrong is when the repayment period is due and you have not paid up the loan amount. Either your car can be picked up and then resold for the money reclamation for the lender, or the repayment period can be bounced back with a new loan amount which includes your original loan amount multiplied by the interest rate.
Be aware of repayment periods
With the bouncing back of the repayment period, you can have your loan amount increasing and increasing with the high interest rates acting up on, ending you up with a very large sum of money to pay back. Remember that repayment periods are usually about half a month to a month long and you have to remember that as fast you have received the money, you have to pay it back as well to avoid having a large sum of money due later on.
If you have any more questions or if you are keen on getting a car title loan yourself, you should enquire with a loan company such as Fast Action Canada, which provides car title loans. At Fast Action Canada, we can process and approve car title loans right away with just a phone call or an online application!