You’re in need of some quick cash and friends have told you about car title loans, which allow you to use the equity in your vehicle in exchange for a short-term, secured loan. It sounds like just the ticket. But you’re wondering, who has the best deals on title loans? Keep reading.
What are Title Loans?
These are loans that use your vehicle title as collateral. And by “vehicle” we mean a boat, motorcycle, or recreational vehicle, in addition to a car or truck. You do get to keep your vehicle; the lender will simply hang onto your title until the loan is repaid. Note that if you do not pay your loan back, the title company can seize your ride and sell it to recoup losses. So be sure you can pay the loan back.
Can I Use My Title Loan as I Wish?
Absolutely. Whereas some personal loans call for a specific purpose, title loans are yours to use as you see fit. Common uses include to repair a home appliance, pay college expenses, fix another car, renew car tags, or to cover a wedding. The sky’s the limit.
How Much Can I Borrow?
Again, that can vary, but loans generally range from between $100 and $10,000 or more, which comes out to between 25-50% of the vehicle’s value. The amount you can borrow largely depends on your ability to repay as well as your car’s, condition, make and model, and age. For more information on this, check out “car title loans near me.”
What are Terms Like?
It depends, but usually, you’ll need to repay that loan in about 30 days, plus interest. If it’s an installment loan, you may have up to a year or so. It may also be possible to submit frequent payments and to clear your balance early, without penalty.
What are Some Benefits of Title Loans?
Every lender and state have their own requirements, but generally, benefits include:
- The ability to keep your vehicle. There are pawnshops that will give you a loan – IF you leave them your keys. This is an advantage title loans have. As we say, the lender will merely hold your title until you’ve repaid. Moreover, if you get a title loan, you won’t have to sell your vehicle to cover your emergency.
- Fast cash. Even if you likely qualify for a bank loan, you don’t have the days or weeks it can take for a bank to decide whether to lend you money. With title loans, you can usually have funds within 24 hours of approval.
- You can apply online. Most title companies will permit you to apply and submit required documents online. However, you can always call the company with any questions, just as a representative will phone you if more information is needed.
- Easy process. It depends on the lender, but you’ll generally need photos of the vehicle you’re seeking to collateralize from all four angles, plus a clear shot of your odometer. You’ll also need a government-issued photo identification, proof of residence, and the make, model, and year of the vehicle. You’ll also need proof that you have the income to pay the loan back. This can be in the form of bank statements or pay stubs. Note that you don’t necessarily have to be employed; you simply need to have the income, such as from a retirement plan.
How to Find the Best Deals on Title Loans
First off, title loans generally have lower interest rates than payday loans, which may not provide you with the amount you need in the first place. So, in that respect, you’re already going to get a better deal.
Also, if you’re looking for a lower payment or rate, some lenders will permit you to negotiate. It does not hurt to ask, nor does it hurt to shop around a bit. You certainly want a loan with a competitive rate.
You should also check whether the company in which you’re interested has a prepayment penalty.
When it comes to getting the best deal on a vehicle title loan, remember that all lenders are not created equally. While you’re the one in a pinch, lenders are in business to make money. So, you do have choices. Also, before settling on a title loan lender, do make sure it’s reputable, credible, and established.