Advantages Of Title Loans
Obtaining a loan can be a difficult process, with many lenders insisting applicants
have exceptional credit histories and income qualification to receive funding. For many would-be borrowers, these requirements are simply too stringent, meaning they are not eligible for traditional bank loans. Title loans alleviate many of these challenges, allowing nearly anyone who owns a car to obtain quick financing, irregardless of their personal credit. Furthermore, these loans can be taken out extremely quickly and for relatively small amounts, making them a perfect option for someone who needs access to liquid capital immediately.Obtaining a Title Loan
Title loans are delivered to an applicant who chooses to place his or her car up as collateral for the requested funding. In determining what funding the applicant is eligible for, the lender will generally estimate the vehicle's worth. This is most often the sole criteria for obtaining a title loan, which is part of the reason they are such an attractive option for candidates who can't obtain funding elsewhere. The Kelley Blue Book is often used to determine the current worth of the vehicle in question, with the lender determining a portion of that to be received in funding.
Advantages over Traditional Loans
Title loans present a myriad of benefits over traditional funding methods. Receiving the loan does not require the borrower to turn in the keys of their vehicle as collateral, meaning it can still be used on a day-to-day basis. Because title loans are for relatively small amounts, borrowers can also receive them sooner than other loans, which often take several weeks to process with a bank or other lender. Title loans are generally for a short period of time, which makes them a perfect solution for busy families and homeowners who simply need short-term funding options to cover immediate debts such as bills and payments on other accounts.
Repaying a Title Loan
Most title loan lenders are willing to work with the borrower to set a repayment plan that will fit the borrower's schedule. Rather than turning to employers or relatives, working out the specifics of a loan with a title loan lender is a much less stressful situation. The lender will also set the applicable interest rate for the loan in question, and help answer any questions the borrower may have about how the lending process works. As most lenders do not report to credit agencies, the repayment process will not impact the borrower's credit score.
The ease of obtaining a title loan makes it an attractive option for consumers who need funding quickly. The money that was used to purchase a vehicle sits locked inside of that asset, so why not use it to help make ends meet in the short term? A title loan can help ease the stress of trying to pay for small purchases and debts, and help set the borrower on the right track to financial freedom. For borrowers who have been turned down by traditional lending institutions before, a title loan can be a true breath of fresh air.
by: John Smithes