There are a lot of purposes for which people take out title loans. Title loans are a type of loan that can be a bailer in emergencies.
Whether you need to pay for rent, school fees, go on a vacation, or complete a project, a title loan can be very helpful especially if you have a credit profile that is not too impressive.
To take out a title loan you need to understand what it means and how it works. An auto title loan is also called a car equity loan, auto collateral loan, or pink slip loan.
Auto title loan is a type of secured loan that allows you to borrow money by using your car as collateral.
Using your car as collateral does not means that the lender will impound or take your car into their possession.
What it means is that you will have to give up the title of your car to your lender. The title is a legal document that confirms you as the real owner of the car.
Leaving your title with the lender means that your lender assumes ownership of the car until you have fully paid off the loan.
How Do Auto Title Loans Work?
When you secure a title loan, your lender places a lien on your title. This is to have some measures of control of the car until you have completely paid off the loan. The title remains with your lender until you have paid off the loan.
As soon as you pay off the loan, you can get your title back and the car becomes yours again. If you are unable to repay the loan, your lender has the right to repossess your car, and sell it to cover the money you borrowed.
With auto title loans, you can still drive your car around. You can also get very flexible and convenient repayment terms.
To secure a car title loan, you need the title of the car to be in your name and also provide proof of income.
These are the two fundamental requirements needed by your lender to secure a loan. Getting a car title loan is fast because it does not require credit checks that other regular lending institutions will ask for.
Not having a job does not mean you cannot secure a title loan, in place of a pay slip, you can also provide worker’s compensation, bank statement, annuity, pension plan, or other social benefits as proof of income to qualify for a car title loan.
Other documents that may be required in addition to your car title and proof of income when you apply for a loan include;
- Proof of residence
- Current auto insurance
- Driver’s license
- References
Advantages
- It is super-fast as funding can be secured in a few hours.
- You can still drive your car around when you secure a car title loan.
- Affordable interest rate.
- Most lenders do not charge prepayment penalties. Prepayment penalties are charges that apply when you decide to pay off the loan before the end of the loan term.
Contact us today, we will be your auto title loan broker, and make sure that you are getting the best loan.
