Facts about Car Title Loans : Online Shopping Guide
Facts about Car Title Loans
What is a car title loan?
A car title loan is simply put, a loan in which the title of a car is kept as security. The loan amount issued depends on the market value of the car. Lenders usually ask borrowers to surrender a spare set of keys to the car in case the latter defaults. The borrowers are, however, allowed to use their car in the payback period. A car title loan has a short repayment period, usually a month’s time. If the borrower fails to do so, the lender repossesses the vehicle. Therefore, the consumer is at a very high financial risk.
How can you apply for a car title loan?
A car title loan is very truly marketed as one of the easiest loans to apply for and receive. If you have a clear title to your car, you just have to make sure the remaining conditions are fulfilled before you apply for a car title loan.
• You need to have the title of your car in your name.
• Your car should be fully insured.
• You should be able to provide a phone bill or other utility bill that verifies where you live.
• If you have a house in your name, a mortgage statement can be forwarded.
• You also have to show that you have been residing in your home (owned or rented) for a minimum period of 12 months.
• You are required to show that you have held a job for at least one year.
• Your income should be at least $12,000 per year.
• You should be at least 21 years old in order to apply for a car title loan.
A car title loan does have its pitfalls though; consumers usually avail a loan far below the market value of their car. The loan has a very high rate of interest and has to be repaid within a short time. There are rollover plans for consumers who may miss their payment when due but these are more of a booby trap. Once the consumer is entrapped, he may end up paying a very large amount as compared to the principle amount of the car title loan. Getting rid of this loan may gradually become very difficult because if consumers fail to pay, they put their car at risk.
Alisha Delphi holds a degree in Economics and Commerce from USC. She started out as a financial advisor with a bank and has moved on to become a loan consultant with more than ten years of experience. Apply for car cash loans application now.
Facts about Car Title Loans / Author: Alisha
