Here, at TFC Title Loans, we are well-aware that many individuals wonder “ How safe are title loans? ” And we acknowledge that the answer can be complicated since title loans, just like any other lending option out there, have both advantages and disadvantages. In this informational article, we plan to explain to you exactly what the benefits of title loans are and the risks. We will also touch on why we believe title loans are safe especially when they are the right option for you. Nevertheless, we understand that title loans may not be the best option for some individuals so we make sure that our potential customers are informed on all aspects so that they can make the best decision for their situation.
Tons of lenders out there do not find it necessary to be transparent and an educational resource for their customers. However, TFC Title Loans has been passionate about consumer education and lender transparency ever since we first opened our doors for business in 1994 as California’s first title loan lender. Over those twenty-five years, we have been able to perfect the lending process so that we might minimize the risks and maximize the benefits. Currently, we are expanding our website to include informative resource articles on all kinds of topics and questions related to title loans.
If you would like to learn more about the various risks and benefits of title loans and know the answer to the question “how safe are title loans”, then continue reading. However, if you are already interested in obtaining an auto title loan through TFC then fill out our online application today. It only takes five minutes to apply and you will be significantly closer to getting the money you need.
So… How Safe Are Title Loans?
Cons of Title Loans
- Repossession Possible: Car Title Loans use your vehicle as collateral for the loan so if the loan was to be defaulted on, then the lender would have no choice but to repossess your vehicle in order to get the funds back that they lent out. If this must be done, lenders sell the vehicle at auction and end up getting less than they would have if the customer had not defaulted, so this is unwanted for both parties.
- Shorter Payback Times: Many Car Title Loans have shorter payback schedules than the typical bank loan. There are some lenders that require the loan be paid back in just a few months which can make the payments astronomical.
- Higher Interest Rates: Since there is a higher risk for the lender when giving out a loan to a customer with a less-than-perfect credit score, Car Title Loans tend to have higher interest rates to make up for the increased risk. This means you could end up paying more back than you would with a typical bank loan.
TFC Title Loans Minimizes the Cons
- Customer Support to Avoid Default: If you are struggling to make payments, all you need to do is reach out to our customer support team here, at TFC Title Loans, and we will figure out a way to help you through the process without your loan defaulting.
- Sliding Interest Scale: We have a product which can decrease the higher interest rates common to title loans through sliding scale interest rates so each loan can be customized to the customer’s unique situation.
- No Prepayment Penalties: We charge absolutely no prepayment penalties so you can pay back the loan as early as you like. If you decide to pay it back early, then you can avoid building interest.
- Longer Payback Terms: We customize our loan terms for each customer with a payback timeline between 24 and 36 months so that the monthly payments are affordable.
Pros of Title Loans
- Quick Funding: We can get you your funds as fast one business day after approval. You can’t get much faster than that.
- No Credit Check: We base the approval and amount of your loan solely on the equity within your vehicle and your ability to pay it back on time. We don’t approve or reject you based on your credit score. If we do check your credit, it is only to ensure that you are not in active bankruptcy or currently undergoing credit counseling.
- Keep Driving Your Vehicle: Even though your vehicle is used as the secured collateral for the loan, we do not deprive you of your mode of transportation. You get to keep driving your vehicle as you usually would throughout the life of the loan.
- Easy Application: Our online application is so simple that it will only take you five minutes to complete. We don’t want to waste hours of your day like traditional bank loan applications do. We know your time is precious so we make things as simple as possible.