There are many reasons why you might require a source of funding. You may need a cash injection to get your business idea off the ground. An unexpected medical bill might have turned your finances upside down. Perhaps you’ve lost your job and need a helping hand to cover this month’s bills.
Fortunately, there’s a similar amount of financing methods as there are reasons to opt for one. All of them come with their pros and cons, obviously, with some having much more unfavorable terms than others.
One option is a car title loan. For the uninitiated, this type of financing involves a car owner trading the collateral of their vehicle for the loan. This form of loan has several benefits, as the following four points will spotlight.
Poor credit score? No problem
One of the major advantages of a car title loan is its accessibility. Those with a substandard credit rating will likely be turned down by a traditional lender, but that’s not the case with a title loan.
In fact, title loans requirements dictate that you don’t need a credit score at all. It’s not factored into the loan decision, and neither are other aspects such as your employment status or if you have a stable income source.
It’s quick and easy
Other lenders will have you jumping through various different loops before they provide you with any financing – and that’s assuming they approve your application. With a car title loan, however, you can have the money in your bank within an hour of starting the application process.
You go through a simple application process, hand over the car’s title to the lender, and receive the agreed loan amount. Make all the payments on time, and the title will be returned once the loan is paid off. Nice and easy.
You still get to use your car
When looking at this type of loan, you could be a little confused about how it works. One question that often gets asked is, ‘Does the lender claim the vehicle until the loan is paid off?’
The answer to that question is, thankfully, ‘no.’ As long as you continue to make the agreed payments on the loan, you still retain full control of the car. So there’s no need to start arranging alternative travel methods.
You can borrow a significant amount of cash
Admittedly, this point is dependent on the type of car you own. However, if you own a vehicle with decent resale value, you could secure a significant amount of cash with your loan.
A number of factors come into play when it comes to determining the value of a car, including the make, model, year of release, condition, and mileage. While it depends on the lender, you will typically be offered a loan worth up to 50% of the vehicle’s value.
Just remember to only accept a loan amount where you feel comfortable in making the payments on time. After all, you don’t want to lose your car because you borrowed too much.