What is a Car Title Loan?
Getting a loan is unavoidable to many workers,andan excellent example of such loans is car title loan. A car title loan is a short-term loan whereby you use your car as a form of collateral to secure the loan. Most time, for you to Loan patronize car title loan, you are probably running bad credits that deny you access to other financing alternatives.While some regions do not allow car title loans,a lot of others do.
How it Works
For you to access car title loan, you must convey the vehicle and the required documents to the lender after which the lender verify the condition of the car and confirm the completeness and the authenticity of the documents.
Despite that many lenders are online; most application processes for car title loan still requires the borrower taking the collateral, the car in this instance for physical checking.
The lender or the credit facilitatorwill put a lien on the car on affirming the condition of the car and confirming the authenticity of the document before disbursing the loan to you.
Usually, for a car title loan, the limit is between 25% – 50% of the car’s actual worth. You are entitled to reclaiming the title free of lien after you have successfully repaid your loan, fees,and interest within the stipulated time usually thirty days.
Documents Required for Car Title Loan
There are some necessary documents you must tender to the lender before they can sanction your loan. Most lenders require that you out rightly own the vehicle to be used as collateral.
It is good to note that some lenders will require that GPS tracking device is attached to your car, this is to enable them to track the vehiclein case you are unable to repay your loan within the agreed timeframe and also grant them the access to disable the car remotely.
Some of these documents include but not limited to the following;
- Original car title showing your sole ownership
- Means of identification matching the name on the title (government issued)
- Proof of residence (Utility bill)
- Vehicle insurance proof
- Current vehicle registration
- Evidence of ability to repay the loan
- Details of a minimum of two references
Benefits of Car Title Loan
· Ease of Access
A car title loan is easily accessible whether from credit unions or online loan grantors. The moment you have the proof of outright ownership of the car, you are good to go
· No Need for Good Credit Score
With a car title loan, you don’t need to have a good credit score. The lenders are not in any ways interested in your loan history since they have your vehicle as collateral assuring them that they will recoup their money.
· Short Processing Time
Unlike many other types of loan, theapplication time for car title loan is a lot faster, Depending on the lender’s capacity; you can get the loan sanctioned between 2-3 days of completing and validating your application.
Car title loan is a good alternative source of loan especially for people with bad credit. You can do well to access it whenever you need instant funding.