Applying for a traditional loan is a daunting prospect, and you may not even get approved for the amount you need.
Fortunately, there is a far more convenient and secure way to obtain financing for your vehicle - getting a title loan. While this is an alternative many people find too risky to consider, it can come in handy when you need quick cash. Here are a few reasons why you might need a title loan.
No Credit Score Checks
If you have looked into traditional loans, you've probably noticed how many requirements they have. The most important one is having a good standing credit score, which is why many people's borrowing capacity is restricted. Title loans, on the other hand, use titles as collateral instead of relying on your credit history.
Lenders won't care if you have bad or no credit, nor will they be concerned with bankruptcies you filed in the past. As long as you have a steady income, a vehicle without a lien on the title, and provide the correct personal information, you'll be able to obtain the cash. In fact, you can use title loans to recover from a financial crisis and build a credit score towards a larger project.
You Can Borrow up to Your Vehicle's Value
Although the exact amount you can obtain through a title varies from one state to another, in most cases, you'll be able to borrow up to the equivalent of your car's value. The amount you'll get may also depend on the stability of your income - but that's it.
There's no complicated formula using your credit score or other existing loans. The lender will simply do a quick evaluation of the vehicle's current condition - and based on its value - they will determine how much to lend you. This means that you'll likely be able to obtain a much more generous amount than you would through banks, pawnshops, or other conventional methods of securing a loan.
Convenient and Fast Processing
Another reason people are deterred from applying for a conventional loan is the agonizingly slow evaluation and transaction process. With a title loan, you can obtain the cash within 24 hours - and without using your bank account that'll burden your credit. So, once again, this method is, without a doubt, the most convenient way to secure financing.
Nowadays, you don't even have to go to your lender's location to apply - all you need to do is to submit an online application form. The Arizona-based financial advisors at Titlelo recommend preparing all the necessary documentation well before you plan to apply to ensure a swift process. This way, you can bring them to your lender right after you get approved and, after signing your contract, receive cash in hand without any delays.
The Title is the Only Collateral
Unlike traditional loans, title loan lenders only use a vehicle's title as collateral, not the vehicle itself. This way, you'll be able to keep your property while you're repaying your debt. That said, most lenders will either ask you to bring the vehicle to them for evaluation or provide proof of its value from an independent appraiser.
The lender will also place a lien on the title, which means they'll have a right to repossess and sell the vehicle should you default on your payments. Still, you won't have to leave it behind, and you'll have full use over it even after receiving the money, which raises your chances of securing the finances for repayment.
More Repayment Options
Lastly, title loans have flexible repayment options. With terms ranging from 2 weeks to 12 months, you can choose how quickly you want to pay it back. Most lenders will help you work out the exact amount to pay per installment, so you can plan your budget accordingly. And to give you more control over your finances, they won't even take your money on payday, but on a day that's the most convenient for you.
In addition, title lenders often allow you to transfer the payments into a new plan if you run into any issues while repaying your debt. Your interest may increase, but you'll have the security of remaining financially stable and maintaining your credit score.
As you can see, getting a title loan has many advantages. With the fast evaluation and transaction procedures, you can get cash in hand much sooner than you would with a conventional loan. While you want to be cautious about the amount you borrow, the flexible repayment options offer a lot more leeway. So all you need is a lien-free, high-value vehicle with your name on its title, and you won't have any trouble obtaining the funds.
