What Are Car Title Loans and How to They Work?

Car title loans offer a valuable solution for many individuals suffering with money problems. Without the need of passing a credit check, borrowers can use the equity in their vehicle to serve as collateral against the loan. The amount of money the borrower can expect is based on the value of their vehicle, its condition, and their ability to repay the debt over time.

Obtaining a car title loan is an easy and streamlined process. Much of the information can be supplied online, in just a few minutes. Providing details including the year, make, and model of the vehicle being used for collateral, along with the borrower’s ability to repay the debt (proof of income), is usually all it is required to get the ball rolling. The information is faxed to the lender (including a copy of the borrower’s driver’s license). The borrower can expect to get their money in just a couple days, and sometimes even quicker.

Bad Credit Is Okay – St. Catharines, Ontario

Unlike conventional loans obtained from banking institutions, credit unions, or when obtaining a credit card, car title loans are available to anyone, even those with bad credit. Individuals that suffer from bankruptcy, or have poor credit histories can easily qualify to obtain a loan using the equity of their vehicle. Even individuals that have had cars repossessed in the past can obtain a quick loan from a car title loan company.

Determining Its Value

While it is easy to look up the worth of a vehicle online, based on its year, make and model, it is not always the way a lender offering car title loans will assess its value. The lender will take in consideration the condition of the vehicle, its mileage, and all pertinent information regarding its make and model. However, the amount of money the company will be willing to lend will be assessed by the borrower’s ability to repay the loan, based on their proof of income. This could be substantially less than the equity value of the car or truck.

Keep the Car 

While the loan is still being repaid, the borrower can keep their vehicle and continue to drive it as normal. The lender will only require an additional set of keys, the title to the vehicle, and the signature of the borrower agreeing that they will make payments on the debt according to the repayment schedule.

The Length of the Loan – St. Catharines, Ontario

It is true that the interest rate on a car title loan can be higher than a conventional loan, due to the waiver on the credit check, along with the higher risk the lender is taking. Depending on the company the borrower selects, the length of the loan repayment schedule will vary. However, some companies allow up to 24 months for total repayment of the debt.

Car title loans offer a unique, quick viable solution for obtaining cash quickly. Without the need of a credit check, and the ability to continue driving the vehicle while repaying the loan, are positive aspects to borrowing money through a car title loan.

 

 

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