Car’s are incredibly useful. Transportation. Storage. The flashy and fast elements you can show off if you’re a fuel machine or a road hog. Yet, the purpose of automobiles is usually to get their user from point A to point B. So, apart from selling when it comes to moving on, or buying a worthy collector’s car, you don’t tend to think of them in terms of money. Yet they can be incredibly useful as pawnable items.
Since it’s actually quite a common practice, title loans probably won’t be an unfamiliar term to anyone who owns a vehicle. Getting an auto loan is a quick process, and can mean money in your hand the same day.
But using a car as collateral?
It does seem slightly counterproductive to day to day life. It also seems extremely risky to hand over the rights to transportation, not to mention the possible value of your car may be to great to risk. However, finding out more about a title loan is not a bad move, especially if a car is all you have at your disposal. There’s a lot of information out there, but I thought I could offer a handy view on the pros and cons of considering . This infographic offers a quick beginners visual guide to title loans and why they’re needed, so check that out for a place to start. Online title loans can be found across the web and also provide the criteria for getting a loan.
Between your car, and coming up with some quick cash, what are some of the main benefits of using a title loan?
- Title loans don’t have a credit check
- Even if you hand over a title, your car is still yours to use
- A straightforward repayment plan and options
And the cons?
- Vehicle loss
- Loan time
- APR rates
The big idea upfront is that you don’t need a credit check in order to obtain a title loan. A credit history when it comes to a bank loan can easily mean requests can be denied as your way with money serves as your collateral. However, now your vehicle does. Then the value of your car will dictate the amount of money you can borrow, but even those old model Fords can fetch you $500 and over, and a lot of the time you can fetch more than this. Feel free to check out the rest of this blog for insights and reviews into car models. Yet this also has a downside due to needing to own your car outright, and sometimes people don’t have that luxury.
The big question is whether or not signing over the title to your car means it’s not in your possession anymore. The answer to that is in the fact that you do get to keep you car and even use it. However, a con on this is that you’ll lose your car if you can’t repay the loan within the short time frame, usually about a month. This can sound practically impossible without a steady income, which is why most sites will not consider a loan with someone who doesn’t fill this stipulation.
Speaking of repayment, may common payment options are available to return money. The traditional use of mail gives you a hardcopy of any payment, and using the phone you can make an in-person payment from a checking account. Services such as Western Union and Moneygram can usually be set up to repay a loan if you’re familiar with those. If you’ve just sent a payment, proof of that payment is accessible. Usually, you will always have the ability to check if it’s been received by contacting the loan centre, and statements can be provided.
Expanding on these side effects, every benefit has its con, and I’m not going to ignore any of those here. Elements such as interest rates and the amount of time you have to pay back a loan is naturally a huge thing to consider. According to Pew Charitable Trust, typical APR on simply 1 month loans equals 300%. If you have the car to spare, and you know you won’t regret it, it might be a better idea to just sell it. But every service has their own terms, so make sure to check out FAQs and have plenty of questions ready at the signing stage. For more information on how title loans work, information can be found at places such as Investopedia, or local government query sites.