A lot of people who are in financial trouble seek ways to borrow money to fix their problems and get back on their feet.
There are some methods that are ineffective while others cost the borrower too much money. For this reason, some consumers consider an auto title loan. Here is a quick guide on how they work and whom it benefits.
Before obtaining a loan, one will need to fill out some paperwork. Also, a consumer will need to bring in their vehicle for inspection, along with the clear title and proof of residence and income. With this information, a loan company can start the process.
Ownership Of Your Vehicle
When bringing in this information, one will not cede ownership of their automobile. Instead, a customer will get a loan with the vehicle providing security to the lending company. Of course, there will be a lien on the vehicle that will be removed upon paying off the debt.
Payments For Your Title Loan
After borrowing the money, a client will have to make, at minimum, $100 monthly payments. This is lower than many competitors who often charge double or even triple this amount.
Not only that, if a borrower’s financial situation improves, he or she can prepay without penalty. This is a serious advantage for a person with an unpredictable income as some companies charge a hefty prepay penalty to their customers.
Title Loan Interest Rates
Now, when borrowing money from payday loan places or other business, one will often pay an extremely high-interest rate. However, with a car title loan, a customer will only pay six percent on his or her loan. In itself, this offers a client a serious advantage. Remember, most payday loans are hard to pay off as the interest rates are too high. On the other hand, most people with a reliable income should not have an issue paying off a loan with six percent interest.
Get Your Money Quickly!
When getting a loan, provided the paperwork is in order, one can walk out with the needed funds within a couple of hours.
When time counts, this is one of the quickest and most efficient ways for a borrower to get the money needed to pay off debt or get back on solid ground financially.
As mentioned, with a car title loan, one will have to provide minimal documentation. Not only that, with the car owner holding on to the title, he or she will feel comfortable borrowing money this way.
With low monthly payments, a borrower from any income bracket should not worry about affording the loan.