When you start shopping for a car, you might be more concerned with additional features and specialty paint jobs than you are about the monthly bill. Unfortunately, the wrong financing can cost you dearly. Compound interest never sleeps, which means that you might be paying much more than you should if you work with the wrong lender. I want to help you to make great financial decisions, which is why I created this website. However, if you can remember a few tricks and keep those payments to a minimum, you can drive away with the car of your dreams without breaking the bank.
Many people turn to loans when they need some cash for expenses. If you have great credit, you might want to ask a bank for a personal loan if you experience a situation where you need some extra money. If you do not have great credit, you could consider a car title loan. Here are four facts to know about getting a car title loan if you need some cash.
1. They Do Not Require a Credit Check
The reason that people with bad credit use car title loans is that they do not require a credit check. When you know that your credit score is lower than you wish it was, you may not want to consult with a bank for a loan. After all, banks always check a person's credit before approving their loan request. A car title lender will not ask for your credit score, and they will not perform a credit check. Your credit does not matter to them.
2. They Offer a Portion of the Car's Value
The second fact about car title loans is that they offer a portion of the car's value. In other words, the lender will not give you 100% of the car's appraised value. They may only give you 25% or 50%, but that is all. They only issue loans for a portion of a car's value and never the full amount. They do this for protection. If the person does not repay the loan, they need some room to make money by repossessing the car and selling it.
3. They Are Short-Term Loans
You may also want to know that car title loans fall into the short-term loan category. After receiving the proceeds from the car title loan, you might have only 30 days to repay the loan in full.
4. They Require Collateral
The final fact about car title loans is that they require collateral. There are loan types that do not require collateral, but this is not one of them. The collateral required to get a car title loan is the title of your vehicle. As a result, the car must be in your name, and you must have the title in hand.
After reading these facts, are you interested in applying for a car title loan? If so, find your car title and a lender that offers them. Once you apply, they'll go over the actual terms of your loan and answer any additional questions you have.
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