If you found yourself in dire need of cash for an emergency expense, then your best option would be to borrow cash. You don’t even have to worry about your bad credit when loaning since your auto title serves as collateral. Here is a basic guide to help you if you want to consider this type of loan for the first time.
How does a car title loan work exactly?
Car title loans are typically like collateral loans. This time, you are utilizing the title of your vehicle as warranty. Your lender will depend on how much they can lend you on the value of your vehicle. As soon as you have settled the loan, then they will return the car title to you. However, if you don’t pay it off on time, they will be able to take ownership of your vehicle.
When you are using your car title as the guarantee, you can still drive and use it during the loan term. The lender will just hold the title until you have cleared your debt. Moreover, car title loans allow other vehicles like motor homes, motorcycles and SUVs as a guarantee.
Are you still qualified if your car is not fully paid or if you already loaned it to another company?
If your car has enough equity, lenders will be able to help you out even if you already used it as a guarantee to another financial institution. Lending companies have encountered different situations and they will be more flexible in accommodating you. Learn to open up to them to identify what is appropriate for you.
What are the upsides and downsides of using your car as collateral?
A loan that is guaranteed by the title of your car is convenient, stress-free and fast. This kind of loan is for people who need cash instantly. It will be easier for you since they don’t really go through credit checks. The most obvious risk you will get from this kind of loan is that you might lose your car.
Ensure that you will be able to pay off your dues as you are putting your beloved vehicle on the line.