What is a Car Title Loan?
As the name suggests, car or auto title loans are short term loans granted against your automobile as the collateral. For people who want some quick cash and do not have any source to generate it, auto title loans work best.
How Auto Equity Loans Work
When you wish to take a car title loan, you approach the lender for the money against the value of your vehicle. You settle on an amount with the lender who gives you the money on the condition that should you be unable to repay the amount of the loan, your vehicle shall be confiscated. In order to be eligible for an auto title loan, you need to own the vehicle completely.
Repaying Auto Title Loans
Auto or car title loans are generally given for short durations, say a month or two. In most cases the repayment time is only a month. The tenure of the loan can be renewed after expiry of the first 30 days. The number of such extensions also have a capping and the time period can be extended only for a fixed number of times.
Car title loans bring along certain benefits which have made them popular among cash strapped individuals in emergencies. Let us see what they are:
- Quick access to cash
It only takes a few days to get funds in your bank account. If you are the legitimate owner of your vehicle, all it takes to get the loan amount is filling out the application (which you see on the right of this page), signing the loan papers, arranging for a time to photograph your vehicle and collecting its title.
- No need for a credit check
Unlike other loans, a car title loan does not run a credit check. This is because your vehicle has been taken as a guarantee. Till the time you have proof of a steady income and own the vehicle yourself, you will have no credit issues coming in your way.
- You can still use your own vehicle
The lender only keeps the title of your car when you borrow money. Once you make the final payment, you get back the title. This means that your daily schedule does not have to suffer because you can drive your vehicle during the duration of the loan.
- Cheaper than a cash advance.
Payday loans and cash advances are more expensive alternatives to car title loans. The fact that the lender has the title of your car as security makes him go soft on interest rates compared to payday loans or cash advances whose interest rates are quite exorbitant.
- Quick repayment schedules
You can repay the amount you have borrowed any time you think you can squeeze it out. Most people pay the amount as soon as their next paycheck arrives however, depending on the sum borrowed, you may need to wait for more than one payday to repay the amount.
With this knowledge about an auto title loan, you will certainly be able to take an informed decision when you wish to take such a loan. The fact that the markets are dotted with institutions which are ready to lend you any sum of money without any terms and conditions makes it important that you shop around to settle with a legitimate lender and avoid scams. If you are also looking for a car title loan from a legitimate lender in Houston, all you need to do is fill up the application form on the right side of this page and wait for our executive to contact you for a fair, flexible and affordable car title loan.
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