How Do Title Loans Work?

by Auto Equity Loans on November 14, 2013

Everything You Need to Know About Auto Title Loans

Perhaps one of the many ways people use to get their hands on quick cash is with auto title loans. These loans allow you to easily tap into the equity your car holds. You can take out a loan even on motorcycles. Debt has a tendency to snowball out of control and has a tendency to get bigger and bigger. These types of loans are great for emergency needs and to help reduce the amount of debt you may have.

No matter what your income level is, these types of loans can help with any financial mess. There are many uses of these types of loans such as closing costs on a home, paying for college expenses, last minute home improvements, and more.

There are many people that avoid taking out payday loans for a number of reasons, and that is why auto title loans are a great alternative. Even with bad credit, these loans are a great alternative to get you the cash you need.

How Auto Title Loans Work

As the name states, auto title loans allow borrowers to use their car title as a form of collateral. These types of loans are available to people who have less than perfect credit, and in fact, many people who apply for these loans have no credit at all. For those with bad credit, this can be great news since these lenders don’t check your credit score.

The loan decision is based solely on what your car’s value is. If you own a vehicle that holds high value, you will be able to get a higher loan amount. This can be beneficial if you have bills or other items you plan on using the loan for.

These loans are not entirely for everyone. While you get the money you need fast, it can be hard for some people to pay off the loan in the specified time frame given. You need to be able to pay back the loan or else you only find yourself in more debt in the process.

Qualifying for Auto Title Loans?

In order to qualify for this type of loan, it’s apparent that you need to have a vehicle and the title. If you don’t have the title to a car, you aren’t going to qualify for this type of loan. Some lenders need you to be a certain age, for the most part 18. There are also lenders that have their own set of requirements, so researching them will save you a lot of time and hassle. You might need to have a minimum income each month as well to prove that you can pay back your loan. Having proof of your current address is required as well and this is done by bringing the lender a bill that is in your name.

Benefits

With auto title loans, there are several benefits. These loans offer fast closing times in addition to a fast approval process. The application itself takes a mere 15 minutes, and in some cases, less. There are other loans as you may know that take days to get approved for and this can be frustrating.

While some loan companies have loans that are higher than what you want, these particular loans can start out at $100 and go higher. If you only need a few hundred, this will be beneficial as you won’t be taking out a high loan and not having the ability to pay it back. This also helps eliminate having to pay a higher amount of interest.

There are also some lenders that will allow you a longer repayment term. Some even extend as long as five years and this should be more than enough time for most loans. Most lenders will work with you as long as you can pay something and as long as communication is present. Also, most lenders won’t penalize for paying your loan off too early.

The process is fast and easy. This helps you get the money you need in a hurry no matter what you may need it for. Lenders refrain from checking your credit score making the process a lot easier. This also is why lenders can loan you the money faster. The lender has no risk with these loans making it easier for them to loan you money. Your car is used as collateral so if the loan is not paid, you lose your car until the loan is paid off.

Why Work with a Reputable Company?

In regards to getting auto title loans with a reputable company, it helps give you the sense of security knowing you are working with experienced professionals. It’s important to make sure you are working with a company that is going to inspect the car and give you the right value. You want a company that is reputable which gives you the sense of security to know you are getting what you deserve.

Make sure you work with a company that is stable. This ensures the transaction is going to run smoothly. You want a company that has been in business for a number of years so you have that stability that is needed for this type of transaction.

Having a company that is registered with the BBB is also going to be your best option. This gives you the peace of mind you need and this also ensures that the company you are working with gives you the best terms possible for your needs.

These auto title loans are becoming increasingly popular and that’s why you want to take time to research companies to make sure they are what you need. Some lenders have certain criteria that you need to meet to be considered for this type of loan.

If you find yourself in a position where you need some cash fast, consider the many advantages of car title loans. These loans are fast and easy to get and for those with less than perfect credit, this seems to be the easiest way to get the cash you need.

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Get Fast Cash with a Car Title Loan

by Auto Equity Loans on January 27, 2012

For anyone looking to get their hands on some cash fast for whatever reason, a car title loan may be your best option. There are a number of lenders available but many people either don’t have the credit, or they just need something short term. The best part of this form of loan is that they don’t run your credit. While this sounds straightforward, this can get you further in debt if you are not careful. Another higher risk you are running is losing your car as it is used for collateral.

How Does an Auto Title Loan Work?

Let’s say you had some jewelry that you were going to be taking to a pawn shop. There are people there that are going to appraise it and examine it to see how much it really is worth. They are going to give you a set amount of money and you give them the jewelry. They also are going to charge interest. If for some reason you do not pay back the money of the loan, they are going to keep your jewelry. This is similar to a car title loan except you are using your car as collateral.


Your car is evaluated and an amount is determined. The estimate is based on wholesale value. Your car’s title is held until the loan is paid off in the specified amount of time. The loan is different from when you initially bought your car. It’s a short term form and the interest is typically higher. Not paying the lender back results in higher interest being added as well as late fees. This leads to the lender getting your car.

How to Qualify For an Auto Title Loan

For the sole reason the loan amount you are given is based solely on your car’s value, these loans are only applicable to those who own their car and have the title. You are not going to be able to even consider this type of loan if someone else holds to title to your car. There may be a minimum age requirement for some lenders as well as having a set amount of monthly income and you also need to have proof of your current residence. This can usually be in the form of a bill that is in your name.

Read the Entire Agreement

While it seems simple to get in your car and drive to a lender, there is typically a little more involved. Before being OK with this type of loan, you need to read over the entire agreement and make sure you have a clear understanding of it. You need to have an understanding on how the lender is calculating the interest. While you use a 3% rate, which is good, you need to make sure it’s not 3% for each month you have the loan. This is going to lead to a heft rate of 36%!

Read about late payments and what the overall total length of the repayment plan is. If you are borrowing $5,000, you obviously are going to need more than 2 months to pay it back. Make sure an agreement is reached between the lender and yourself.

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Why Obtain a Car Title Loan?

by Auto Equity Loans on January 12, 2012

With the state of the economy seemingly worsening over recent years, it us becoming harder and harder to make ends meet. Sometimes you have some extra money that you try to hold onto for a rainy day, other times you wonder how you can come up with the extra money to pay your bills. There are different methods of acquiring some fast cash without committing any type of crime punishable by jail time or calling long lost relatives. These methods include different types of loans; one such loan you may consider is called an auto equity loan.

An auto equity loan is normally a short term loan supplemented by some form of collateral, normally in the form of your vehicles title loan, or in some cases, using your current home value to aid in the purchase of a new vehicle. These types of loans are normally very fast and allow you to take out any size loan up to the current wholesale value of your vehicle without subjecting yourself to background checks or credit checks which could further hurt your credit.

There are two main types of auto equity loans. The first type involves using your current vehicle as collateral for the loan. In order qualify for this type of loan, most companies require that the vehicle be less than ten years old, the vehicle must be worth at least $2,500, and the applicant must be at least 18 years of age. If you meet these requirements, you may be able to apply and qualify for a loan of this type. Since you are putting up some sort of collateral, these types of loans are usually much quicker and simpler than some other types of loans, usually resulting in receiving your requested loan amount the same day you apply.

A standard auto equity loan is normally a very short term loan, usually lasting a month or less. The companies add on an annual percentage rate (APR) to cover their expenses for writing the loan as well as covering their payroll. Normally these annual percentage rates are somewhere in the area of 20% of your total loan. Most companies will loan you up to the amount your car is worth but usually have a minimum loan amount that varies from company to company but normally range in the $500-$1,000 area.

In order to apply, most companies also require that you provide an auto title that is clear of any liens, your personal information, driver’s license, social security card, vehicle registration, proof of insurance, a recent paycheck stub, a recent utility bill, current mortgage statement or lease, and usually up to 4 references. This information is usually reviewed by a loan officer for approval before you receive your loan. Some companies allow you to fill out an online form and approval is done electronically. Since collateral is being used, most companies do not require a background check or credit check, and usually don’t worry about past bankruptcy filings or lack of credit history. This allows those with bad or no credit to receive the money they may need as quickly as possible.

Even though it is called an auto equity loan, you don’t necessarily have to offer up your main form of transportation as collateral. Most companies will also accept motorcycles or some sorts of farm equipment as collateral as long as the total wholesale value of the item meets the loans minimum standards. This policy varies between loan companies so make sure to discuss this option with your lender as well if this is a viable option.

The 2nd type of auto equity loan is using your current home value to purchase a vehicle. Normally, a loan is taken out against the current value of a home in order to purchase a new vehicle and creating a lien against the property as collateral for the debt. This type of loan does have its perks as normally, the interest charged on this type of loan is tax deductible because the property is used as the collateral. Using this type of loan is normally less expensive due to the lower interest rate.

With both types of loans, the usual repayment period is usually around thirty days in which the loan fee is included. If the full loan amount is not repaid within this period, the fee is normally added back on to the total amount owed. Some vehicle owners who use their car as collateral for these type of loans may be tempted to roll over that fee to the next month which is allowed, however it is normally much more costly in the long run to pay the additional fee every month rather than paying the entire balance. Due to this, it is usually best to abstain from these types of loans except for in cases of dire emergencies.
Most companies, in case of financial hardships, are willing to work with you if you cannot make a payment or two. They should supply you with a phone number to contact them in these types of cases and will normally suggest some sort of alternate repayment method or will work with you to find a solution. If payments are still not met and a further agreement cannot be established, the loan company has the option to repossess your vehicle if deemed necessary.

It is always advisable to seek financial advice from a trained financial advisor before seriously considering taking out any sort of loan. Your financial advisor may have a better idea to assist you with your financial needs or may be able to point you in the direction of a reputable lender or service. Make sure if you are in the market to apply for a loan that you do your research on the company to make sure it is a legitimate loan service rather than some sort of scam or scheme to obtain your personal information. Keeping your confidential information from prying eyes should be your top priority as it could save you from a major headache down the road.

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