A title loan is one of the best options available for people who want to get cash quickly. Instead of asking others for money, you can just apply for a title loan on your own and quickly get the cash you need. Many people are looking for alternatives instead of going the conventional banking route. Banking loans are often approved over the course of a week or two, and most people simply don’t have that much time to wait. Instead, title loans give you the amount of money you need quickly, without having to go through all the hassle.
But the problem is that most people don’t know much about these loans, and often end up making crucial mistakes that affect their experience. If you are thinking of applying for a title loan, there are several important things that you should know. Here are seven key things that you should know about such loans.
1. Understanding the Nature of the Loan
A title loan is a secured loan, though many people don’t know that. In fact, a title loan requires you to allow a voluntary lien to be placed on the title of your car as collateral before the loan can be granted. The lender will place the lien on the title of your vehicle until the loan amount is paid off in full, after which it will be removed. Because it’s a secured loan, you don’t need to worry about jumping through the hoops as you would with a standard unsecured loan.
2. No, Your Car Won’t Be Confiscated
A lot of people are also under the assumption that when they apply for title loans, they are essentially giving their cars away to be kept as collateral. Again, that’s not true; the lender won’t take your car while the loan is repaid. This means that you can drive around freely without any problem whatsoever.
3. There Are Several Lenders
Because they have gotten so popular, there are now a myriad of different lenders and businesses that offer these loans. This means that the terms and conditions are likely to vary depending upon the lender and their own policies, so it’s best if you apply for loans from several places and then compare your options carefully. It’ll make it easier for you to figure out where to get the loan from.
4. Every Case Is Treated Individually
Keep in mind that the terms and conditions are not fixed by any means. Every case is treated on an individual basis, so it all depends on your own personal circumstances, the kind of car you drive, and the amount of money that you want. For instance, if you own a vehicle that is more expensive and has good resale value, you can apply for a higher loan amount as well.
5. The Loan Amount Isn’t Restricted to the Value of Your Car
Another common misconception that many people suffer from is that they think that the loan amount is usually restricted to the value of their car. That, however, is not true. You can often request an amount that is higher than the value of your car, though it’s important that you first review the terms and conditions by your lender before deciding. It’s recommended that you go through the policies set in place by the lender and find out whether they are suitable or not.
6. It’s Approved Quickly
Another very important thing that you should know is that these loans are approved much quicker as compared with other types of loans. The lender simply wants to make sure that the documentation provided by the applicant is valid and verified, and once they have evaluated your application, they will let you know whether you are approved for the loan or not. Either way, you will know the result within a day or two only.
7. It’s an Excellent Choice
If you just need a quick injection of cash and don’t want to go through a lot of trouble, applying for a title loan is, simply put, an excellent choice. They are approved easily, you don’t need to go through a lot of trouble, and best of all, the repayment plan is incredibly convenient.