If you need money fast, and you cannot access a traditional loan because of bad credit, a car title loan can be your best solution. Title loans allow people to get fast cash without going through credit checks, and in many cases, with minimal verification of income. Accessing this type of loan is very straightforward but it is important to be careful to avoid getting deep into debt, or losing your car.
There are many lenders offering these loans and it is important to find the best ones. When you get a title loan from a good lending company, the monthly payments are fully amortized. Every payment you make goes into paying not just the interest but also the principle. This means that you will not have to come up with a huge sum of money to pay the balance of the loan. With online applications and new technology, you can get a title loan in three easy steps.
- 1. Loan Application
When you apply online for the loan, it goes through a quick pre-approval process. The application is secure and the experienced loan officers carry out the review. With some lending companies, you might need to go through a process where you answer a few questions through online chat. This will help to expedite the loan process and you can clarify any questions you may have while also getting assistance in the application process. This process will differ in duration depending on the lending company.
- 2. Processing the loan
Once you have completed the application process, the loan officer assigned to you processes your loan request. The details required for complete processing include your personal information and details about your vehicle. Information about your driver’s license, car insurance and registration is required. You also need to present proof of your current residency by providing a recent utility bill or mail. Proof of your earnings or your latest pay stub is required, and many lenders will ask for a few references. These requirements will differ from one lender to the next.
- 3. Receiving the cash
The final step in the loan process is simply receiving the cash. Many lenders will direct you to their location closest to you where you can pick up the cash. At the location, you need to check the paperwork and append your signature to the necessary documents. The agent takes photos of your car and within minutes, you are home free driving off in your car with a pocket full of cash!
Qualifying for the loan
The title loanis based on the equity in your car, and this will determine the amount you can borrow. Lenders require you to own the car outright for you to qualify for the loan. If you are still paying for your car the title is in the banks custody and you cannot use it as collateral. It is very important to read the fine print and understand the conditions of the loan. Make sure that you know what you are committing to before you collect the money. Read the contract and look for information regarding the interest rate. Find out how it is calculated and the duration or time period.
When you decide to get a title loan, you should note that the lenders are in a different category to banks and credit card companies and they do not fall under the same laws. This means that the lenders can charge much higher interest than traditional financiers can. Look at the terms from different companies so that you can get the best loan for your circumstances. Make sure that you find out all the additional fees and the penalties for nonpayment or late payments. It is important to understand if you stand to lose your car after one late payment.
Richard Dural is a blogger and a self-professed financial geek who is passionate about his favorite subject. He has written several articles on personal finances and title loans California. He also works as a financial consultant.