Not Your Traditional LoanA bank loan application requires your credit history, employment history, and other personal information. Once they have all the requirements, the lender will then begin the process of examining the borrower’s credit-worthiness. Applicants will have to wait for weeks before they know if their loan has been approved. Car title loans, on the other hand, are quicker and easier to process. Potential borrowers just need to fill out an application form and start the process. Upon submitting the form, the title loan company will then ensure the title matches the vehicle and assess its value. Once they have the car’s approximate value, they can immediately approve a loan.
An Ideal Financial SolutionThe entire process normally takes an hour. Lenders also do not require employment verifications or credit checks. Since your car serves as the collateral, there’s no need for the additional paperwork associated with conventional loans. Auto title loan lenders hold the title, and if the borrower fails to repay the loan, the former will become the vehicle’s owners. The speed and convenience of car title loans make it the ideal Plan B for financial emergencies. Another benefit of an auto title loan is that you can still drive your car. Once you make your final payment, you get the title back. So, you don’t have to worry about getting around when you take out this type of loan.
Car Title Loan ConsiderationsIf you are planning to apply for a car title loan, consider the following:
What are the Features and Benefits?In Texas, there are many types of title loans to choose from, with varying finance charges and types of interest depending on your situation and needs. The main advantage of this loan is the ease of obtaining it. Lenders will have manageable requirements and terms, such as no credit checks and minimal paperwork, and some could even make instant approvals. With just a car title and few supporting documents, you can walk away with money in your wallet and still get to drive and own your car. There is a catch, however, as with all secured short-term loans. If you miss a payment, make a late payment, or not pay at all, the lender will take hold of your car. So if you’re considering this option, make sure that you are financially capable of meeting your monthly interest and principal payments.
How Do Car Title Loans Work?There are three things to know about the structure of a title loan:
- Loan amount
- Term length
- Interest rate and finance charges