Car title loans have been around for years, yet the most common question we hear is “How do car title loans work.” Much like payday loans and installment loans, a title loan offers you a way to get a lump sum of cash quickly. There are a lot of things that make car title loans different from typical short-term loans. The most significant difference is that you’re securing your vehicle to the amount borrowed. That’s right, with most types of online title loans, you must let the lender attach a lien to your car. Here’s the good news: With a pink slip loan, you can get much more money than expected if you go to a bank or credit union.
You might be concerned about attaching your car’s title to a loan. There are a few things to remember with a title loan when thinking about how they work. You can apply both online and in person, and these lending offers allow anyone with a lien free vehicle to borrow upwards of $20,000 with that collateral. Take Texas as an example of a state with increased lending opportunities. Title loans never used to be a popular funding option, but over the past few years, we’ve seen an increase in companies offering loans in the state with excellent financing terms.
It’s in your best interest to cash out equity from your vehicle with a lender that offers the lowest interest rates. Also, there’s no longer a need to give up your vehicle as collateral for a loan, and instead of the car, you only need to hand over a paid off pink slip as collateral. We recommend first speaking with a representative who handles title loans. You finish the payoff when you complete the monthly installment payments. Upon paying off the amount in full, you will no longer have a lien attached to your vehicle, and you can get the pink slip back.
Another aspect of car title loans you must understand is how the online application process works. The lender must verify you’re the current owner, which is the most essential component of title loans. A finance company needs to know there’s equity in the car, and they can use that collateral if there’s a default. They need to ensure you have no liens or other issues that could impact your title situation. It would be best if you also verified the car exists.
Believe it or not, some people try to apply for equity funding without verifying they have a car! Like most other types of short term borrowing, these loans have got a bad rap over the past few years. People say the interest rates are too high, or they say some lenders will immediately seize your vehicle. This can happen if you fall even one day behind on your monthly payments.
Most reputable title lenders and RV title loan companies will dispute that interest rates are too high or take advantage of people needing quick cash. They say the interest rates must be high because they won’t generally check your credit. If you have past loan delinquencies or other financial issues, that won’t permanently disqualify you from a loan.
Car title loans are great for people needing money for a financial emergency. However, you can run into trouble when you borrow more than you need and can’t afford the monthly payments. The average title loan repayment term is 16 months and some companies offer repayment terms that stretch to 36 months! Anyone who gets a title loan with a lengthy payment term like that can expect excessive interest rates and it won’t be easy to repay.
Contact Car Title Loans 123 to learn more about your options if you’d like to apply for a car title loan. Start with us online or call 844-567-5011 to cash out equity from your vehicle!