If you are in need of some quick cash, one option you might want to consider is a car title loan. Cash loans for car titles can help you get some much-needed funds quickly for an emergency or unexpected expense. However, there are some things you need to know about these loans first. The following are some of the major pros and cons of car title loans.
Advantages
Fast cash. The major advantage to getting a car title loan is you can receive money quickly using this type of loan. You can often get the money within just a couple of days of qualifying. That is because the loan process is a very easy one. All the lender needs to do is appraise your vehicle and let you know how much money they are willing to loan you. Once you accept the offer, you can usually have the money within a couple of days.
Easy eligibility. Anybody who owns a car can get a car title loan. Your vehicle is used as the collateral on the loan. You are borrowing off of the value of your car. Lenders will typically loan you up to 50 percent of your vehicle’s value.
No credit necessary. It doesn’t matter if you have bad credit since the lender does not check your credit. You are using your car as collateral, so that is why the lender doesn’t care about your credit history.
Disadvantages
You could potentially lose your vehicle. If you default on your loan, your car can be taken away from you to repay the loan.
High-interest rates. Most car title loans have quite high interest rates. These also tend to be short-term loans, such as one month. If the interest rate not stated in APR, ask for that rate so that you can compare to any other options you might have.
Extra fees. Some car title loans have a number of upfront fees, such as a document fee and processing fee. Others will have a flat fee, no matter how much your loan is. Be sure to carefully review these fees before agreeing to a car title loan.
A car title loan can definitely provide you with some much-needed cash very quickly. If you have poor credit but own a vehicle, it can be a great way to help you out of a financial jam. However, you do need to be aware that this type of loan does tend to be more expensive than most other types, so you need to weigh the pros and cons carefully before making your final decision.