When you are burdened with a mound of unpaid bills or facing a short-term financial crunch and you need some money to tide you over till your next pay check, a car title loan can come in handy. This loan is especially convenient for those who are not eligible for a bank loan or have a poor credit rating.
Getting a Loan Using Your Car
Car title loans, auto title loan, title loans, etc. all these in simple words mean you pawn your car when you are in need of urgent cash. In other words, your car is your collateral, and a source of instant money without the usual paperwork and other formalities.
You are required to deliver the title certificate and an extra key to the lender, and the upside is you get to keep your car during the loan period. Should you default on repayment, the lender gets to keep your car and can sell it to recover the loan.
Applying for a Loan
The procedure to obtain a car title loan is fairly straightforward. There should be no prior loan against or pending payments for your car. The loan amount is calculated on the condition of your car, and its resale value. As a loan applicant, you should be 18 years of age, and will need documents to that effect.
The other documentation required is proof of residence, a valid driver's license, contact information, and income details. Car title loans are very convenient because you can fill out the application form online.
Repaying the Loan
Once you repay the amount and the interest within the stipulated time, the lender will return the title certificate you submitted earlier. You can extend the repayment tenure by rolling over the loan into the next month. However, car title loans are not all rosy. Since this is a short-term loan, the interest rate is quite high.
Rolling over the loan can cause you to end up paying more than the actual value of your car. Should you fail to repay the loan and interest levied on time, you might even have to forfeit your car. So, weigh the pros and cons carefully before going in for car title loans.
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