Many people are in a situation where they desperately need money, but nobody seems to be willing to supply them with some. If this is your situation, you don’t have to worry just yet, because there are other options out there as well. One of those options is actually your vehicle. And no, you don’t have to sell it! You can use it to get a car title loan and get out of the financial pickle you have gotten yourself in to.
How Do Car Title Loans Work?
Getting a car title loan is really easy and really quick, but you do have to own a vehicle that is completely yours. What you basically do, in very simple terms, is temporarily sign the vehicle over to a lender. In return for this, they will give you money.
There are now numerous car title loan providers that operate fully online. They use the internet in order to be able to reach the greatest number of customers. To make sure that they are competitive and easy to use, they have also designed software applications that are easy to fill in and instantly give you an idea of how much you can borrow and what it will cost you.
Unfortunately, car title loans do come with very high interest rates. However, this is also because they are very short term loans. This means that your percentage of interest is very high, but you only pay that once, rather than over a long period of time. When your loan is getting approved, they look at what your car’s value is, which means that they don’t care about your credit score. They may, however, want you to have comprehensive care insurance in place. Three points are important when it comes to determining how much they will borrow you:
- The value of your vehicle.
- How much money you want to borrow.
- How you intend to pay the loan back.
A Pawn Loan Is not a Title Loan
A lot of people think that a title loan is basically a pawn loan, but that is not true. The big difference is that you get to keep your car for the duration of your loan. Of course, if you don’t pay your loan back, the lender will repossess your car in order to recover their costs. Hence, if you have any doubt about your ability to repay the loan, it may be better to pawn your car, or even sell it instead.
If you do have difficulties in repaying your loan, you may be able to roll it over once or twice. This means that, rather than paying the entire loan amount back, you will only pay that month’s interest. You will, however, have to pay the loan back sooner or later. And when you start rolling your loan over, you also start to notice how high the interest rate actually is. Hence, you want to avoid this as much as possible.