Thinking about taking out one of the many car title loans which are now available online? If that is the case then hopefully you will find the information you need to make an informed decision about using this popular credit product right here. We're going to discuss all the stuff that matters regarding car title loans looking at what they are, how much car they could make available to you and what to look out for when considering these loans. After reading this article you should be able to decide for yourself if using a title loan is a good idea.
What Is A Car Title Loan?
Car title loans have been on the market for a while but many people still haven't heard about them mainly because they are something you encounter when you get desperate for cash and can't find anyone willing to lend. The are becoming more popular now thanks to the worsening economy as individuals find it tougher to survive on their pay. Title loans were created to offer an option to people with a bad credit rating to allow them to get access to a fast cash loan using their car as security.
How Do I Get An Auto Title Loan?
Applying for an auto title loan is pretty simple, you just need to pay a visit to your local lender or alternatively you can now fill in the necessary forms online. After you fill in a simple application you will be informed as to whether you have been successful. Online borrowers who meet the requirements will have to take their car in for review at the lenders local office.
How much cash can I get?
These loans are secured on your car so the amount of money that is going to be available to you will be directly related to the value of your vehicle with the agreed loan usually being about 50% of the market value of your car.
Disadvantages of the Online Car Title Loan
An online car title loan can sound like a fine idea when you get yourself into a situation where you really need to get a loan fast and you find yourself with a bad credit rating. It should be noted however that there are things about this product that make them undesirable and for some people it may be better to avoid their use if possible.
These loans are very expensive, charging interest rates of over 300% and if you are used to using credit from the bank you will be surprised at how much they can end up costing you. A $1500 loan taken out for just one month will result in a $300 dollar interest payment.
There will also extra fees from the lender which can include processing fees, document fees, late feed etc which can end up costing you an additional $100 on top.
Plus, it is important to remember that this is a secured loan with your car used as collateral so the lender will be only too happy to take your vehicle into their possession if you aren't keeping up with your repayments.
Are Car Title Loans Right For Me?
When you think seriously about the negative aspects of a car title loan it should be obvious that this is something that is only to be used in genuine emergencies when you have nowhere else to turn to for help. Using them always has the potential to make your already precarious financial situation much worse.