Car title loans can be an excellent option when you’re in real need of funds and you need the cash immediately. If you approach this loan option with an understanding of how it works, you can save your credit, if not your life. If you’re paying it back on time, a car title loan can be a good option for a loan with less paperwork and fewer hassles.
You can obtain a car title loan by securing a loan using the value of your paid-off vehicle. It is rare for a person who still owes money on a vehicle to receive a loan. The titleholder usually has to be the owner of the vehicle. You can get title loans in 24 hours. The loan amount will be equal to the resale value of the vehicle. If the vehicle is older and less gently used, the loan amount will be lower. Loan amounts for newer vehicles are higher.
Most of these loans have very high-interest rates to push borrowers to pay them back on time as well as generate a large profit margin for lenders. You will pay only one interest fee if the loan is repaid within thirty days, which is the usual repayment term. If you need the funds now, it is probably worth it to pay it back.
If you cannot repay the loan within thirty days, it may be rolled over for another month up to six months; however, each extension incurs a new interest rate. The fees can mount up to a point where you owe twice as much as what you borrowed. The lender may retake and resell your car for them to recoup their losses if you can’t pay your loan after six months.
A loan like this may be your best bet if you have a plumbing problem and are surrounded by three feet of water in your home. By the time you receive your check, your house may be in ruins because it may take weeks to get a typical loan. Using this type of title loans in 24 hours can help to solve this problem as soon as possible. The loan can also be used for unexpected medical expenses.
Be sure to have a repayment plan in place before taking out this type of loan. Therefore, there will only be one finance fee to pay, and the money will still be available when you need it. When used appropriately, a car title loan can be a lifesaver.
