Are you interesting to know how to turn your car into cash? Well these loans, known as Car Title Loans, are perfect for those individuals whose credit score is less-than-perfect and consequently can’t get approved for a loan from the bank. You used your car as collateral for these secured loans so you can borrow money despite a poor credit score.
It is a relatively new financing method that is usually process through lenders that specialize in it. The whole process is very quick and simple compared to the long and arduous process that takes place with the bank. The amount that you can get on a loan depends completely on the current market value of your vehicle.
Lenders who offer these kinds of secured loans on vehicles, usually require a few things before approving you. Typically, the requirements include:
Year of your car: The limitations on the age of your car change depending on the lender and the state you are applying in. It usually varies between five and ten years of age. However, there are exceptions made for valuable cars like classics and antiques, since they have more equity because of their age.
Its general condition: The car must be in decent condition even if it isn’t brand new. The better condition your car is in, the more money you can get on the loan. Since the car is your guarantee of repayment, it needs to be in condition to sell in case you default on the loan. And by being in generally good condition, it’s usually meant that not only the outside look of the car is good, but the car as a whole including the engine, the electronic systems, suspensions, wheels, etc.
Documentation: You will be required to show all the documentation for your vehicle. These documents presented ought to include the insurance documents, the maintenance records, and the title of ownership. Making sure you have all of this will help you get a larger loan since the value of your car is higher when it is taken care of actively.
Proof of exclusive ownership: As we said at the end of the previous section, you will need to present your title of ownership to prove that you are the sole owner of your vehicle. It is this title that the lender signs onto as a lienholder meaning they have a legal right to your vehicle if you don’t pay the loan off according to the designated schedule. Even though the lender keeps the title, you still keep and drive the car. Once you have paid the loan off, you will receive the title back.
Free and clear: Obviously, to get a title loan on our car, it must be paid off in full and free of any other liens placed by other loan companies. In other words, no automobile whose purchase was made through credit which is still active can be used as collateral. However, there are some exceptions made for those who only have one or two payments left on the car.
Just as you would before applying for a personal or mortgage loan from a bank, you must compare and contrast between the terms and rates offered by various different lenders that you are thinking of obtaining title loans from.
The three key aspects that you should pay the closest attention to are the following:
Interest rate: This type of loan is made for individuals who, due to their credit history, do not have easy access to personal loans offered by banks. As a result, their interest rates are substantially higher based on risk. This is why it would be wise to compare the different rates offered so that you can find the lowest one.
Value of your vehicle: Depending on the make, model, age, condition, etc., the lender will give you an appraisal estimate of the second-hand market value and set the maximum that they will be able to lend you.
Deadlines: Unlike banks, Car Title Loans tend to have less extensive loan terms for repayment meaning you may have to pay it back faster than you would with a bank. Many lenders have extremely short loan terms meaning you have to make large payments. However, TFC Title Loans has worked hard over the years to extend our loan terms so the monthly payments are more affordable for our customers and their particular financial situations.