If you are in the midst of a financial emergency either because of an unforeseen expense such as a medical emergency, or looking for relief from current debt, you may be wondering where you can turn. A problem like this is only made worse if you are struggling with a poor credit score or credit history. Your options may be quite limited, but one option that may be available to you as long as you own a car and have a lien-free title is taking out a car title loan.
Car title loans are a type of secured loans that is based off the value of your car. That means that you are borrowing the money from a lender based on the value of your car and the equity you have in it. It can be a great resource if you have no credit because it is typical that car title lenders do not care what your credit is and will not even ask to see your credit score or learn about your credit history.
So, how do you take out a car title loan? It is actually quite easy.
There are two primary ways to take out a car title loan, either in person or online.
If you are interested in applying for a car title loan in person, simply head to a local car title lender with your car, a valid government issued ID, a lien-free title, proof of insurance, and proof of income, and apply. Car title lenders make it their job to get you your money as quickly and as easily as they can. They will evaluate your car to make sure that it qualifies. That typically means that it holds a value of at least $2,500. They will also check your proof of income to make sure that you can actually pay back the loan within the payment term. Once that is taken care of, you can expect to have your loan in hand within an hour.
If you decide to apply online, the process is quite similar except for the fact that it is all done on your computer. You will submit the aforementioned necessary documents, and you will most likely be asked to share either photographs or a video of your car so that the lender can evaluate its value. After that, you can expect to receive your loan anywhere between an hour and 24 hours. Just like in-person loans, online title lenders make it their priority to get you your cash in hand as quickly as possible.
After you qualify for a car title loan and take out your loan, you will want to keep close notice of your payment term. That means how long you have to pay back the loan, plus interest, in full. Typically, car title loans are short-term loans which means that your payment term can last anywhere between a couple weeks and a month. While car title loans with longer payment terms exist, short terms are most definitely the norm.
Finally, it is important to know that if you are unable to pay back your loan within the payment term, you risk defaulting on your loan. If you default, your lender has the option to repossess your car as collateral and use it to cover their losses.
If used responsibly, car title loans can be a great option if you find yourself in a financial jam. If you are looking for places to turn, a car title loan may be a perfect option.