Options for a Car Title Loan


Financial difficulties are a common fact of modern life. Even the most effective budgeters can often find themselves ?in the red? or facing a shortfall of cash. For some there are savings to fall back on, but for many more the only answer lies in a loan of one kind or another.

There are many types of loans, from home equity to personal loans, but one of the most widely available to the largest number of consumers possible is the car title loan. This is something that is structured identically to a home equity loan, wherein the property is used as collateral to secure the loan. In the case of a car title loan, however, it is the owner?s car or truck that is put up as a way of securing the funding.

What can the funds from such a loan be used for? There are no limitations as to the use of the money provided through a car title loan, but the borrower must always remember that it is indeed a loan. This means that in the very process of acquiring the funds they must also make arrangements to repay it as quickly as possible in order to ensure that their car title remains clear.

Why would a consumer choose this over a standard personal loan? There are many valid reasons for turning to a car title loan including speed, availability and terms. Let?s first consider the speed.

Most traditional bank or credit agency loans demand that the borrower fill out an application. This application is usually accompanied by documentation that might include pay stubs, copies of tax returns and other financial data. This takes time to compile, copy and finally submit to the lender.

After receiving an application, the bank will formally review and check all of the information before deciding whether or not a loan can be granted. If the answer is yes, the bank then has a formal closing on the loan and deposits the funds into the borrower?s account. Such a process will take more than a week to accomplish.

If, however, the borrower should decide to use a car title loan instead, they would simply contact the lender and make the appropriate application which is reviewed immediately. The funds for the loan would be available to the borrower within twenty-four to forty-eight hours after that time. Clearly, this is a superior arrangement, but the benefits of opting for the car title loan don?t end there.

In addition to being much faster in its ?turn around? time, a car title loan will also be available to someone with poor credit or even no credit history at all. This is because the lenders tend to recognize that the loan is being made in an emergency situation and that the borrower is offering collateral. This adds up to enough for most lenders who rarely refuse requests for a car title loan.

Finally, there are the terms available for those who seek such loans. These terms usually include the opportunity to choose between automatic payments, varying amounts and repayment terms. For example, someone applying for a car title loan will usually be able to decide if they would like the lender to automatically deduct their payments each week or month, or if they will handle the process on their own.

Additionally, the lenders do not lock their borrowers into one set amount, but allow them to request only the amounts they need. Some banks and credit agencies demand minimum loan amounts and will not provide funds to those in need of a smaller loan. Finally, some lenders provide access to a longer repayment period if that is what the borrower is going to need.

Will the vehicle owner have to actually turn a car in to a lender or is it just the title? This is a frequent concern for many borrowers, but the fact of the matter is that it is a free and clear title that is submitted to the lender. They will retain the title as a way of securing the repayment of the loan. Once the borrower has repaid their loan in full, the title is returned without any further paperwork or processing required.

Using a car title loan is a creative way to get funding quickly and without a lot of hassles. Some people use such loans for emergency purposes, but there are others who find it a convenient way to purchase an item for their business or to have ready cash at hand for a special purpose. For example, if a business owner is replacing a company car, they might take a car title loan against it to enable themselves to have a larger down payment available for the new vehicle. Once they acquire the new car, they can also repay the small loan and perhaps sell their older car for cash!