It happens to the best of us. When you’re dealing with finances, there’s always going to be a time when your credit score is less than perfect. It could be caused by something that’s totally out of your control. But having poor credit often means you are not going to qualify for most forms of funding like bank loans or even installment loans. Bad credit will really limit the options available and you’ll need to choose between borrowing money from a friend or other high interest loans. Without hardly looking, we can often find a local provider of cash advances or a payday loan company who’s been in business for years. Most often same companies will provide online title loans as well. It used to be that someone who wanted to use their pink slip for funding would get together with a lender in person. That means you had to find a service in the yellow pages and walk into their office. These days, an online cash advance is much easier to apply for and you can get an answer on approval within a few minutes. Most short term lending services provide a good outcome, as a needy borrower can get money. But It’s important to know what outcomes you’re looking at if you default or fail to abide by the contract you sign.
Most of us associate a cash advance with an installment loan and further with a vehicle equity funding. You’re borrowing money to pay for an urgent expense. The only difference here is with a secured loan you will be putting up your vehicle as collateral. Consider, that’s a big difference than if you were looking at an unsecured loan. Most payday advances are in the range of a few hundred dollars. Some will hit $500, but they’re nowhere near the amount you can borrow with online title loans. A company that provides the cash directly can offer a qualified consumer well over $5,000. It all depends on the equity in your vehicle and whether you can pay back the loan according to the financing terms. Having bad credit won’t mean you can’t qualify. The financing company looks at the condition of the vehicle and other factors that aren’t at all related to someone’s credit history.
We hear of situations often where someone walks into a retail short term lender and requests a vehicle title loan of a few thousand dollars. A client also has excellent credit but brings problem’s that outweigh a positive FICO score. Even though a good FICO score is important, there’s a lot which can go wrong with how your credit score is calculated. It may not be necessary to have an excellent score, but still contact the bureaus if you see an incorrect score or report. Unlike a bank loan or money you borrow from a credit union, it’s not always important to bring the best credit score. An underwriter will have concern about fraud. Reason being, why apply for a high interest online title loan when you can easily qualify for a personal loan or bank financing?
Typical requirements include:
• Needs to be at least 18-years-old
• Same employer for 3 consecutive months
• Active checking or savings account
• No outstanding bankruptcies
• Needs to be a U.S. citizen
We know there are numerous downfalls that come with a loan where you use the available equity in your vehicle. Opposed to a payday advance, you’re going to be giving up the pink slip to a car. Consider a scenario where you may lose the ability to drive to work if your car gets repossessed for lack of payment. Another issue to content with is the fees that come with car title loans online. Most borrowers know about the interest rates and high finance charges. But did you know there are other fees like origination charges and late fees if you happen to fall behind? Consider the fact that you don’t need good credit to get approved, but there’s a reason why you should use that good credit score. Take the time to meet with a banker and apply for a personal loan. You can save a large amount of money with the lower interest rate and hold on a title loan.
First factor to consider is if you live in a state where secured loans are legal. Some states completely ban this type of lending outright, others make it very difficult to get a financing approval. Once you determine you’re state is good to go, you want to find a company that has good rates and is looking to win your business. Don’t apply with the first service you come across. You have many ways to get cash in a large state like California and you should use them against each other. Contact a few lenders and let them know you have bad credit but enough equity in your auto to qualify. If one firm gives you a high finance charge or terrible payoff term, let them know. Don’t settle for a bad loan!
Another option involves applying with a direct lender that provides multiple financing options. These can include a secured loan, cash advance or even a line of credit. There’s no need to go through a middle man or broker to evaluate the different choices. Also, you can skip the step of working with a company that’s not making the final underwriting decision.