If you’re in need of immediate cash, a car title loan is one convenient option. It’s always smart to fully understand a loan before you sign on the dotted line. Here’s everything you need to know if you’re considering a car title loan:
A car title loan is a short-term loan, typically for an amount under $1,000. These loans include interest, and fees are also common. As you’d expect from the name of the loan, you use your car title as collateral, which means you need to have your car paid off to be eligible for these types of loans.
The time frame for repaying the loan is usually within 30 days, but this varies depending on the terms of the loan. If you’re unable to repay the loan within the designated time period, the loan is renewed, which is referred to as rolling over the loan. This leads to more interest charges.
You keep your car during the entire loan and repayment process, with the lender only repossessing your car if you fail to pay it back. Once you repay the loan, the lender returns your car title to you.
The Application Process
Applying for a car title loan is a simple process that you can do either at a car title loan store or online (although you still have to go in to give the lender your title if you apply online). You fill out the application and show the lender your ID, your car, and its title. The lender will most likely perform a vehicle inspection. If the lender approves your loan application, they provide you with the money and keep your car title.
When to Get a Car Title Loan
There are a variety of situations when a car title loan could be the right choice – maybe you’ve had an unexpected financial emergency and need money right away, or maybe you’re waiting to start a new job but need some cash to get you through the next week or two. If you need quick cash without the hassle of applying for a bank loan, then you may want to consider a car title loan. It doesn’t require all the documentation of other loans, and you can get money the same day.
The most important thing to remember with a car title loan is that it’s for a short period of time. If you need a long-term loan, it’s worthwhile to check out some other options to avoid paying too much interest. Go with a car title loan when you’re confident that you’ll be able to pay the loan back within the designated time period.