A title loan is when the borrow gives the title to their vehicle to a lender as collateral on a loan. It could be a title for a car, truck, or motorcycle, and the approved amount for the loan will depend on the value of the vehicle. This provides the lender with assurance that the loan will be paid back, and provides the owner with motivation to pay back the loan in a timely fashion.
These types of loans are generally short term and for relatively small amounts. Most must be paid back within 30 days. They are often viewed as a type of payday advance loan since the term of the loan is so short. One of the many perks of this type of loan is being able to get access to the money quickly.Borrowers will typically look for the fastest title loans available.
While terms may vary based on the lender, typically you just need proof of residency matching the name on the title for the vehicle. Proof of residency may include a utility or tax bill. You will also need the current registration for the vehicle and proof of car insurance. The lender will also want to see pay stubs or other proof that you can repay the loan in the time allowed.
Title loans will typically have no impact on your credit score either good or bad because the lender does not check your credit prior to approving the loan. While some may argue that title loans are not a good idea, they are ideal for people with few other options due to bad credit.
Because the term of a title loan is so short, the amount of the loan is typically smaller than traditional loans. A title loan may range from $100 to $5500. The more valuable the vehicle is, the more you will be able to borrow. This doesn’t mean you will be able to borrow the full value of your vehicle however. In most cases, you can expect to get up to 50% of the resale value of the vehicle in a loan.
Unfortunately, title loans typically have a noticeably higher interest rate than traditional loans. However, banks that provide traditional loans have a significantly more difficult approval process and they take longer. When you have bad credit or no credit or when you need money right away, a title loan is a valuable option.
Needing a personal loan is not a bad thing, and it is certainly not an uncommon thing. According to recent reports, nearly 70% of adults in America have less than $1000 saved for emergencies. This means when something comes up like needing a new furnace or hot water tank, they likely do not have the money on hand to pay for that. People report the top three reasons for obtaining a personal loan are vehicle expenses, keeping up with bills, and personal emergencies.
Over one-third of the adult population has gotten a personal loan for one reason or another. This is not an uncommon practice and if done responsibly, can help in emergency situations. The key is to not borrow more than you can pay back and to always pay the loan off on time.
Often times when people are looking for a title loan,they are looking for the fastest title loans available due to the emergent need for the money. As discussed, these types of loans are most often needed in response to an emergency, so getting the fastest title loans possible is the primary focus.