You never know when life can take a detour and you need some cash in a hurry. If you were to lose a job or have unexpected medical bills to pay, getting money quickly can be a challenge for many people. If you have less than perfect credit, finding a lender can be a challenge. But, if you own your own vehicle you may be able to successfully apply for a car title loan.
With limited options, it can be easy to get pulled into the never-ending cycle of the payday loan. These types of lenders may seem convenient and practical, but are known to use less than moral financial practices to pull people in that cannot afford their repayment schedule. Getting out of a situation like that can take time and more money in fees and elevated interest payments.
If you own your own vehicle and want to know how much you may be able to borrow, you can use this easy car title loan calculator. This should give you a general idea of how much money you could get by using your car to get a personal loan.
What Is a Car Title Loan and How Do They Work?
With this type of secured loan, the lender is asking you to provide some financial assurance that the loan will be paid in full. You can offer the title to your car as collateral to secure a loan for a percentage of what your vehicle is worth. Even if you have less than perfect credit, with the collateral securing your repayment to the lender, it is much easier to get approval than with traditional loans. If you can’t make the repayment requirements, your lender will take the title of your vehicle and sell it to get back their money.
Pros & Cons
- You can use your loan money for anything you need without restrictions
- Rebuild or establish new credit
- You may still qualify even with poor credit
- Set up flexible and realistic repayment terms
- Lower fees and interest rates
- You can still drive your own vehicle
- You are risking losing your vehicle if you don’t keep up on your payments
- You will only be able to obtain up to 50% of the current value of your vehicle
Do Your Research
There are many types of lenders that will approve a car title loan. Make sure that you do your research and look at banks, credit unions and private lenders for the best loan arrangement for you.
Take a close look at each lender’s interest rates and fees, their repayment schedules, and maximum limits to help you make the right choice.
How To Apply
Once you have found a lender that is a good match for you, it is time to apply. For a car title loan, you will have to provide your lender with your basic personal information including your address and contact details. You must provide proof of ownership to the vehicle, valid proof of insurance and your employment information including paystubs.
Your lender will want to know the year, model and make of your vehicle so they can do a proper appraisal on it. Once you have gathered all the paperwork together you are ready for your application.