How Do Car Title Loans Work
If you have a car, auto title loans can be a good source of easy and fast cash for you during desperate times.
It is very easy to qualify and get approved of a car title loan as long as you clearly and freely own the title of your auto and don’t have any problems with regards to your vehicle. Other than the auto title, some lenders will ask a spare key of the car in cases when they have no other choice but to repossess your vehicle because of failure of payment on your part.
Truth About Car Title Loans
Although car titles loans can be helpful during trying financial times, you have to be very careful with them. It is always best if you make car title loans only a final resort because they are among the riskiest type of loans available nowadays. Thus, turn to car title loan only during emergencies. Also, pay the loan at the soonest possible time. Otherwise, you’ll be in danger of eventually losing your car.
How Car Title Loans Work
Car title loans are short-term loans. Loan terms vary between 30 – 60 days. Owing to this, interest rates of car title loans can be very high. Apart from this, car title loans are very different with credit cards. They don’t follow similar terms and conditions which mean that it is really possible for your auto loan interest rates to balloon due to additional fees and charges. The interest rates can be around 100% to 350%. Unfortunately, you won’t be able to discover this because lenders will be showing you yearly interest rates. These rates appear lower than the actual interest rates you have to pay since the term period for car title loans is definitely much shorter.
What actually happens when you get approved of a car title loan is you place your car as collateral. Usually, the loan will only be about 30% to 50% of your vehicle’s cost. The loan agency will take hold of your title as protection in case you go default with your payment obligations. This will be in their hands until you’ll be able to pay the loan in full. This might sound simple logic but actually it is not. Truth is it is very hard for you to pay the loan back since the interest charges easily go up! What I am trying to say is that you can be at a much greater risk of having your car repossessed.
Thus if you need this type of loan, search around for lenders with the best terms first so that you won’t be in danger of losing your vehicle. Lucky for you, there are lenders with flexible terms! Research is the only key to finding them.