Car title loan firms do not have the best reputation out there. Some are afraid of these types of loans based on the experience or what others have to say. Yes, car title loans have high-interest rates compared to conventional loans and failure to pay can result to the loss of your car, but then this is the case with any kind of loan that's collateral based.
Perhaps you do not have adequate money in savings for a certain project, and maybe you do not have a credit card. You can ask your friends and loved ones for help, but even they can be cash strapped sometimes. With a car title loan, it is all about being responsible. Some make the mistake of applying for a loan that they will have a hard time paying. If you know how high mileage loans work, then they can be an excellent solution for your situation.
If you require instant cash assistance, then getting a car title loan can be the answer to your prayers. That being said, here are some benefits of car title loans:
No Credit Check
If you try and secure a loan in a traditional way, chances are you will have a hard time, especially if you need the money fast. The underwriting process tends to take days for many and given the fact that banks are picky, you may not qualify, even when offering collateral. However, things are different when it comes to a car title loan. The requirements are pretty simple, with most lenders just asking for a car title, proof of a bank account and employment. Since there are no credit checks, you'll pay a higher interest rate, but that is the price of easy approvals.
Better Than Selling Your Vehicle
You may think of selling your car to meet your financial demands, but a car title loan is usually better than selling. Taking the selling route can put quick money in your bank account, but you will also lose your car, which can be a bigger hurdle if you really depend on it. A car title loan, on the contrary, takes possession of your car title and not the asset. As such, you get to drive your vehicle as usual.
Get Money Fast
Since the underwriting process of typical loans is quite lengthy, it may take a number of days to secure a loan. If you need money fast, this is clearly not the best route to take. However, car title loans are approved quickly, usually in just a few hours after the verification of your financial information. In less than 24 hours, you will have the cash.
Flexible Terms of Repayment
If you are familiar with payday loans, then you know that they have to be paid back in full in around two weeks. Well, car title loans are ideally short-term, but you are given a number of months to pay back the full amount. Terms may vary, but they are very flexible and most lending firms will work with you to create realistic and affordable terms.
In a financial crisis, a car title loan can either be your best friend or your worst enemy. Know the requirements, the terms and pick a reputable lender.
