Quick Guide to Car Title Loans

Life does not stop for anyone. Occasionally, money emergencies come up. It could be a medical issue or job loss. There are some options available for individuals in that predicament. Personal loans and credit cards can help in a pinch. However, for those whose credit needs some work, taking out a car title loan may be an option.

Purpose of Car Title Loans

For individuals who need money, they can use their vehicle as collateral. This type of secured loan is called a title loan. These loans are meant to be short-term and have high-interest rates. Now loan also offers this type of loan in the UK for people with bad credit.

A person that has low credit may decide to take out a title loan because it has very few requirements. Credit scores are not usually considered when approving a title loan. If a person does not pay their loan in a timely manner, they can have their car repossessed.

The Car Title Loan Process

An individual can apply for a title loan provided that they own their vehicle outright and the car title has no liens. While submitting the application, the car needs to be inspected by the lender. The lender will also need to see the car title for proof of ownership as well as the driver’s license.

Once the loan is approved, the car title will be given to the lender. Most title loans, like payday loans, usually have a 30-day term. Once the loan period has ended, a lump-sum payment needs to be paid by the borrower. The lump-sum includes interest and fees. On average, lenders charge a fee of 25% per month.

Not paying the loan on time can lead to the borrower losing their car. A person that is considering a title loan wants to make sure they are able to pay off the loan in a timely manner so as not to lose their vehicle.

Example of a Car Title Loan

Usually, when a person considers getting a car title loan it is because of a change in finances. For example, Ricky has been fired from his job, and he needs money to cover his expenses for the month.

He may decide to borrow against his car with a car title loan. The car is worth $4,000. So, the lender grants a loan of $2,000. Ricky has to provide documentation like the car title. As for the interest rate, Ricky assumes the 20% monthly interest rate is annualized.

At the end of the 30 days, Ricky is supposed to pay $2,400. However, he only anticipated paying $2,034. Unable to find the difference to complete the payment, Ricky loses the title of his car.

Title Loan Amount

The title loan limit can be between 25% and 50% of the car’s value. The lender will need to examine the car to figure out the worth of the vehicle. Loans can be anywhere from $100 to a few thousand dollars.

Title Loan Alternatives

There are some alternatives to a car title loan. Federal credit unions offer payday alternative loans. These loans are unsecured. However, the loan amount is smaller than a car title loan. The good thing is it is possible to make monthly payments that are affordable. For individuals considering this route, they will have to be part of a credit union to be eligible for a payday alternative loan.

Personal loans are also unsecured loans that are offered by a lender like a bank. The interest rate tends to be lower than a title loan. The repayment period can range from two to seven years. Although poor credit can make it difficult to get this loan, it is possible to get a cosigner.

Getting a credit card requires paying the balance every 30 days. Paying off the card every month means taking out an interest-free loan. Balances that are unpaid at the end of the month accrue interest. The interest rate, though, is lower than title loans.

Asking friends and family for money can be a great way to avoid taking out a loan. They are flexible in coming up with a repayment schedule. Their terms on interest may also be less compared to other loan options.

The Wrap Up

Car title loans can help those with poor credit to get a secured loan. They are short-term loans that are meant to be paid off in a one-month period. Those that are considering a car title loan need to make sure that they are able to pay off the loan and understand the terms of the interest rate. Here at MaxCash Title Loans, we can help you get a cash title loan in a fast and easy way. We offer both small and large loans. Call us today or apply online today at https://www.maxcashtitleloans.com/.

Explore more

Books on Cryptocurrencies and Blockchain Technology Worth Reading

Books on Cryptocurrencies and Blockchain Technology Worth Reading

You're diving into cryptocurrencies and blockchain technology, and these books are essential. 'Mastering Bitcoin' by Andreas M. Antonopoulos offers deep technical insights on Bitcoin's...
Office Desk

How to Personalize Your Office Desk for Comfort and Efficiency

Personalizing your office desk is essential for creating a workspace that enhances both comfort and efficiency. An organized and well-designed desk can boost productivity,...

Prune Trees, Shrubs, And Flowers For Healthy Growth

Pruning is essential. It helps flowers, shrubs, and trees stay healthy and shaped. All plants need pruning at the right time. The ideal seasons...

One Click Away: Why You Should Buy Travel Insurance Online

We live in a world where convenience is given the most importance, whether it is a product or service. As the world moves towards...
Summer Survival

Summer Survival Guide: How to Stay Cool and Comfortable

With summer just around the corner, it’s safe to say that the days will become warmer as temperatures start to rise. It may seem...

How to Hire a General Contractor: Checklist and Tips

By Hovik Akopyan, General Contractor at Akopi Builders Introduction When embarking on a construction project, whether it’s a new build or a major renovation, the decision...

Cryptocurrency Security: Shielding Your Digital Fortune

Embark on a journey to fortify your digital wealth in the realm of cryptocurrencies. From the rise of digital currencies to the evolving landscape...
5 Reasons Why You Should Hire A Roofing Company 

5 Reasons Why You Should Hire A Roofing Company 

When it comes to maintaining the integrity and longevity of your home, the importance of a sturdy, well-maintained roof cannot be overstated. However, problems...