There are many options available to someone who needs to come up with cash quickly. The best solution depends on that person’s financial situation and stability. For someone who is in a poor credit situation, the options for obtaining a cash advance or an emergency loan are extremely limited. Without assets to rely on, that person would need to try for an unsecured bank loan, which would be very expensive to compensate for the high risk taken by the bank. If that person with bad credit owns a car, however, than a car title loan is a good solution to instant cash.
What’s Good About Car Title Loans?
Obtaining a car title loan does not require the borrower to have any sort of a credit rating. That means that individuals who have not yet built up a credit history as well as those with a bad credit rating can equally apply for an auto title loan. The same applies for people who are self-employed and find it difficult to obtain a loan. Car title loans do not require a credit check, so anyone can apply.
- Car title loans are secured by the value of the car so they are lower in risk.
- The car is used as collateral, but the owner keeps the car and drives it. Only the car title is required for security.
- Most applications for car title loans can be processed over the phone or online.
- A simple application process with fast loan preparation.
Wrong with Auto Title Loans?
- If the loan payments are not made, the automobile can be sold to pay off the debt.
- The loan amount is limited to a percentage of the value of the car.
- A lien will be placed in the car title until the loan is paid in full.
As in all things, caution is the best rule when taking out any type of a loan. The borrower needs to have adequate monthly earnings to repay the loan to keep from going deeper into debt. Responsible borrowing will help to secure a strong financial future.