While car title loans have a bad reputation, they are not generally harmful to borrowers. If they really were, they would have been prohibited, just like the no-doc loans and other types of illegal lending methods.
Read on to learn more about titles loans and their benefits.
Car Title Loans Basics
Title loans are a secured form of lending in which you offer your vehicle’s title as collateral to the loan company. The lender will then evaluate the quality and condition of your vehicle to determine how much to lend you. You will need to repay the loan and the interest on whatever date is agreed upon.If you fail to repay, the lender will repossess the vehicle to recover lost profit.
If you have unexpected expenses and need instant cash, these loans can be the answer. UtahMoneyCenter.com says that title loans enable you to get the money you need within just a day or two.
Furthermore, there are no background or credit checks involved in the loan process. The lender offers a secured loan, which means that it is based on a property or collateral you are putting up. People with bad credit histories may also see title loans as one of the few financing sources available to them. Many lending companies allow those with bad credit and bankrupt histories to borrow money.
Keep Your Car
Another benefit is that even if you have taken the loan out, you can still keep the car and drive it. You will just need to give the title and a pair of keys to the lender, but you are still able to keep the actual vehicle. Title loans are also available for other types of vehicles such as motorcycles, trailers, and RVs.
Car title loans can be an excellent way to get cash on short notice if you’re ready to repay them immediately. Understanding the risks associated with the loans are also important before deciding to take out one.