All You Need to Know About Car Title Loans
At some point, you may find yourself in a position where you need some money in a short time. People looking for quick cash often turn to car title loans. If you need quick approval on a short-term loan, car title loans around of your options. However, car title loans generally come at a very high cost. You need to pledge your car as collateral to get a car title loan. You are required to hand over your car title to the lender until your loan has been fully repaid. Unless you are out of options when dealing with an emergency such as trying to put together some money for medical treatment, a car title loan should be the last thing you need to think about. However, car title loans more expensive than they are worth, and you face the risk of losing your car when you get one.
Borrowing against your vehicle is only possible if you have enough equity in your car to fund a loan. Many lenders require you to have paid off any lunch you may have borrowed to purchase the car. With some lenders, you may still qualify for a car title loan even if you are still servicing a standard auto purchase loan. The amount you qualify to borrow is determined by the value of your car or the equity you have in the vehicle. You get to qualify for a higher amount if the car has the higher value. In most cases, title loan services do not offer the cars full value since they want to have an easier time getting back their money if they have to repossess and sell the vehicle. Depending on your lender, you can only qualify for a loan that is between twenty-five and fifty per cent of your car’s value.
Depending on your options and preferences, you could decide to apply for a car title loan through a storefront finance company, a credit union, or a bank. Credit unions and banks offer better deals when it comes to car title loans. There is no constant face on those loans, and they also come with longer pay off periods extending to up to five years. In most cases, however, car title loans are usually short-term loans that are due within fifteen to thirty days.
You can decide to roll over the loan if we paying within the specified time frame becomes a challenge. This option automatically qualifies you for a brand new thirty-day loan instead of repaying your current. Rolling over the loan makes it even more expensive since you make new loan fees payments every time you do it.