Not everyone can boast of a squeaky-clean credit rating, especially over the last few challenging years. With money being tight these days, securing short-term loans to bail ourselves out of tricky situations is a much-needed part of modern life and something most people will need to do at some point.
A poor credit rating is often affected by the most trivial, unfair reasons, which adversely affect our lives in more ways than one. Unfortunately, most secure loan lenders require a good credit rating, regardless of the loan amount. If you are hoping to borrow money, you will be in an awkward position because of this.
Finding a regular, traditional secured loan will be difficult with a less-than-clean credit score without jumping through various hoops to secure one. This means we must consider other options when looking for a personal loan if we have poor credit.
Few Quick Options
There are other loans available to borrowers but at a considerable premium. Despite attempts to regulate the industry, predatory lenders do exist. As a result, many people are forced to agree with an unfavorable interest rate when emergency cash is needed. Borrowers are almost boxed into a corner during emergencies, knowing that terms are horrendous but without many other options.
But there is an option that won’t take advantage of you through a highly unfair interest rate. It’s also an option that is surprisingly easy to secure without having to jump through those hoops we just mentioned:
We are, of course, talking about the option of car title loans as a fast solution to this common problem.
Car title loans are an extremely popular method of securing quick, much-needed cash without the added hassles that often come with arranging loans. What’s more, there isn’t a faster way of securing a quick loan with reasonable rates, with funds sometimes available to the borrower in under an hour.
How Does it Work?
There are two main types of car title loans available. Both are based on using your vehicle as collateral for borrowed money, with your car title temporarily signed over to the lender. Car titles remain under the borrower’s control without you singing them over entirely.
The first option is to take out a single-payment title loan, wherein the borrowed amount is paid back at the due date in one payment. Interest is paid in one payment, together with the settlement. This might be a helpful option for those who are temporarily struggling for immediate funds but anticipate a windfall to land at some point shortly.
The second option is to take out an installment car title loan, in which case the borrowed money is paid back over a loan term. This option might be considered for those who need quick cash and have the means to pay it back gradually over a short period.
The general term for either agreement is usually a ‘car title loan,’ but the same arrangements can be secured using motorbikes, motorhomes, trailers, and even boats.
How Can I Apply for a Car Title Loan?
There are usually two ways to apply – in person or online – either way, you will need to attend in person at some point to demonstrate your car to the lender and show that it is in reasonable working order.
In addition to showing the car, you will also need proof of title ownership, insurance, and identification, at some point during the process. The best thing with a car title loan – apart from its quick and hassle-free nature – is that you get to keep driving your car during the agreed period, although some lenders will ask for a spare set of keys for the vehicle, returned once the loan is settled.
Let’s examine how a car title loan might play out with an approximate total cost.
For example, let’s say your vehicle is worth $10,000. You are suddenly faced with some emergency in which you need to find $2000 quickly, without too many hassles or delays. It would be best if you had cash quickly, but your credit rating is low, and the banks won’t help.
By securing cash for title as collateral, the lender will allow you to borrow that much-needed $2000 against your vehicle’s title.
Fees vary from lender to lender and can range from 15% to 25%, so on a $2000 loan, the total cost to you would be$150 to $250. While this isn’t exactly the best value around in terms of interest rates, it is better than many of the alternatives and is fast.
How Much Can I Get?
This depends entirely on the vehicle’s model, year, and general state. An expert will value the vehicle, and with multiple branch locations, the chances are you will not be too far away from an appraisal office, and the whole process is pretty quick.
The car title loans expert will check your vehicle for general condition, wear and tear, and basic mechanics. Essentially, this will be a similar once-over you might expect from a potential buyer.
Another factor to consider is how the lender perceives your ability to repay the car title loan. As already mentioned, no credit checks are involved with a car title loan, so your financial circumstances do not play too much of a part in the application process.
That said, most lenders will need to see evidence of wage slips and proof of employment when deciding the terms of the requested amount.
Can I Roll Over a Title Loan?
Life throws obstacles in our paths when we least expect it, with best-laid plans sometimes going out of the window. You might agree to a car title loan with the firm belief that you can pay the car title loan amount back on time, only for a new problem to show up and prevent you from doing so.
With most lending options, this could present a pretty serious problem. If, for example, you take out a small car title loan with the bank and struggle to meet the terms, the bank could, in theory, put a lean on you without any reasonable solution to your predicament.
With car title loans, most lenders (but not all) will welcome negotiation to dig you out of your temporary problem and prevent any nasty recourse, such as losing your vehicle.
This is often known as a ‘rollover’. The lender will arrange a new agreement with you, rolling over previous car title loans into a newly arranged one. This will add further fees and interest into the new amount you have agreed to roll over, but if the alternative is losing your vehicle, it’s a good option.
For example, imagine you have a $1000 car title loan with a $250 fee. At the end of the agreed term, you cannot pay the whole amount back to the lender. So, you would pay the $250 fee and roll over the $100 balance into a new car title loan with the same percentage fees.
Some lenders allow you to negotiate rollover terms two or three times if needed, although we advise against that as you could end up in a sticky situation three or four months down the line.
If you are not desperate for quick cash and have a healthy credit score, you might explore more traditional ways of securing a loan. But a car title loan could be a good fit if you need fast cash without any credit checks and minimal hassle.Questions about a title loan? Reach out to us today for a quick chat – or go ahead and get started right away. We could have your much-needed car title loan in no time at all, with terms that won’t take your breath – or your car – away!