Car title loans are among the types of loans that can be obtained very quickly, short term cash loans, by almost anybody. As long as you own a car, you probably qualify for such no credit check loans (some lenders may also require proof of employment, but not all of them). As such, they represent great solutions when you need quick access to a considerable amount, as you can most certainly obtain more than with other types of quick loans, such as payday loans.
Main Advantages of Car Title Loans
The main advantage of a car title loan is the easiness to obtain it. The only real prerequisite is to own a vehicle. Your credit score doesn’t matter much, since most of the lenders won’t even run a check on it. Their risk is covered by the value of the vehicle itself, so there is no need to take the creditworthiness into account. This also means that the there’s not much red tape or paperwork to deal with, and you should receive your money in your account in a couple of days.
Since the competition among lenders is rather high in this area, you should always shop around and find the best deal. Make sure you understand exactly what you’re getting yourself into; very often, the approximate quote you receive over the phone is very optimistic, and then you’ll quickly find out that the lender is willing to give you considerably less, once they get a chance to evaluate the car. Don’t allow them to pressure you into accepting a deal that you’re not comfortable with, as there are plenty of other lenders around, and you will surely find what you’re looking for.
Risks Associated with Car Title Loans
While the auto title loans are a great solution for quick cash when you desperately need it, you should also be aware of the risks. Weigh your options carefully and take your time before signing any contract. The easiness to obtain these loans is one of their biggest advantages, and, at the same time, one of their biggest downfalls: people are tempted to rush into accepting any terms, and then they find out they cannot afford to pay the interest rates.
There are many reputable companies out there that offer this product, but there are also lots of predatory lenders, that can sense when you’re desperate for cash, and will try to push the worst conditions on you. If you have a lot of problems on your mind at the moment, it’s best to ask for advice from a friend or family member, who may have a better perspective on the whole situation, before signing the deal.
Also, make sure you can repay the loan and the interest rates on the due date – which is typically within 30 days. The sad reality is that most car title loans get extended for many months, even up to a year, because the borrowers cannot afford to repay them on time. This means they continue to accumulate those huge interest rates month after month – so try to close them as soon as possible. If you need to borrow a large amount, or if you need a long-term bad credit loans, there are plenty of other solutions on the market that have better terms and considerably lower interest rates. Auto title loans are a great resource for emergency cash, but should not be used for any other purpose.