A car title loan is a form of secured credit that is lent to a person on the basis of his car title and theamount of the loan is determined by the value of the car. If you are unable able to repay the full loan or it goes in default, then the lender holds the right to sell the car and recoup the amount of the loan. When you take the car title loan, you get the money in a very quick manner. To securethis loan, you can ask for quotes from different lenders. But before opting for it, ensure that the interest rate is not too high and that you are able manage the payments each month.
How to obtain the car title loan
You can qualify for a car title loan, if you are able to tender the following documents: The title of your car, your drivers’ license, your proof of present address like the electricity bill, etc. and finally, proof of your income, either the pay check or income statement in case you are self-employed.
Quick and simple approval
Car title loan can also be availed on a small, short-term basis, but the borrower has to secure it using his car. The lender puts a lien on the car, and if the borrower is not able to pay back the car loan amount, the lender may take the car. Therefore, it is important that the car has no other liens on it and it is completely owned by the borrower.
Even most pawnshops can start this business without any special license in most states. But some states, follow formal licensing procedures, and the records show that the number of licensed title lenders has increased from 21 in 2000 to 45 in April 2004. This figure does not include the pawnshops that provides this service. In 2002, it was on record that these licensed lenders offered approximately 16,000 loans.
Some customers and lawmakers perceive that this business is flourishing at the expense of the poor people, as they don’t have any other loan alternative. They can be easily drawn in its vicious circle. But the studies conducted on this subject is not collaborative this view. Most of the borrowers do not default on the loans nor get their cars taken by the lender.
Getting the right car title loam
When searching for the best car titleloan, you must know the extra cost involved in it. Especially, as a first timer, you are required to take into account all the extra and hidden costs involved with the loan. Don’t allow yourself be tricked by fees or costs that the lender attempts to give. Ensure you are sure of what you are getting yourself into.
So, by considering all the pros and cons of the loan offers made by the lenders you can easily get a competitive new car title loan. If you search around, you will find a lot of dedicated, trustworthy as well as reputed lenders who possess the ability to match your present financial position with their best scheme. This easy approach will make your search for the lowest car title loan rates very easy and convenient.