Car Title Loans Explained
There may come a time when you need some fast cash to address a few issues. People looking for quick cash often turn to car title loans. They are an option if you need quick approval on a short-term loan. However, car title loans are generally very costly. To get a car title loan, he was required to place your car as collateral. The lender takes over the position of your car title until you have completely paid the loan. A car title loan only makes sense if you do not have any other options during an emergency such as if you need money for medical expenses. Car title loans are generally more expensive than they are worth and you face the prospect of losing your car if you use one.
You can only borrow against your vehicle if you have enough equity in your car to fund a loan. It is a requirement by money lenders that you have the use of other loans used to buy the vehicle. However, other lenders you still allow you to borrow a car title loan even if you are still servicing a standard auto purchase loan. The value of your car for the equity you have in the vehicle determines the amount you qualify to borrow. Cars with a higher value offer more cash. Most lenders, however, do not offer the cars full value out of a title loan since they want to have an easier time reselling it to get back their money if they have to repossess it. The loan amount usually varies between twenty-five and fifty per cent of the value of the car.
Car title loans are available through storefront finance companies, credit unions, and banks. You can get better deals by applying through a credit union or a bank. There is no constant face on those loans, and they also come with longer pay off periods extending to up to five years. Most of the other lenders of a shorter repayment period that could be as little as fifteen to thirty days.
If you have problems facing the loan amount and the interest within the specified time frame, you can choose an option that allows you to roll over the loan. This option automatically qualifies you for a brand new thirty-day loan instead of repaying your current. Rolling over your loan is however an expensive option since you are required to pay new loan fees every time you do it.