Are you in a tight fix and need to get a quick loan? If you have a bad credit score that keeps you from accessing traditional short-term loans or lines of credit, then taking out a car title loan is one way to get some fast cash with no credit check and minimal income verification.
This may seem pretty straightforward, however as with any other type of loan, if you are not managing your finances that effectively, could lead you further down into debt and in worse cases, without a car. In order to avoid this type of scenario, we are giving you a better understanding how car title loan works so that you can be armed with knowledge and make it work in your favor.
First, weâ€™ll need to understand what are car title loans?
This is a type of a secured loan where borrowers can use their vehicles as collateral. These loans are typically short-term which requires very little in order to be approved for one. There will just be a temporary exchange wherein you will hand the lender the title of your car to get a cash loan worth of your vehicle and you will get the title back once you have repaid the loan.
How do car title loans work?
This is something similar to pawnshop loans. Car title loans use your automobile as collateral to secure a short-term loan for a fraction of what your car is worth; provided that you own the car without any loose ends. If you are short on cash, this form of loan can help you out no matter what state your credit background is in.
It is also possible to use a title loan to refinance your car. However, when it comes to refinancing your car, you may not qualify for many of the programs offered because of a poor or limited credit history so you may have to make a larger down payment or pay higher interest rates. In a lot of areas, you can use a title loan as a more flexible option to repay your auto finance loan while you get back on your feet. Unlike direct dealerships, banks or credit unions, title loans can be often extended in cases you canâ€™t afford to repay the entire amount by the deadline. That way you can get the money to catch up on vehicle payments or even repay your remaining balance.
Paying more for your vehicle than itâ€™s worth – or even taking longer to pay your car off are probably the last things you want to do. If you feel that you are ready to get a car title loan, you can apply online. Online applications are quick and simple. Find loans with low interest rates and flexible payment plans that are available in your area with your loan could be available in 24 hours or less and you can even keep and drive your car while repaying the loan!
Feeling Clever? Join our newsletter!
Subscribe to get the latest from "Clever Dude."