What Are The Advantages Of A Title Loan Over Other Loans?

A title loan simply refers to any type of loan that an individual or legal entity obtains using the title to any property

. Some misunderstanding exists in the perception of the term by consumers based on the fact that a title loan is most often associated with car loans. On the contrary, any registered property can serve as collateral for a title loan, even intangible assets like stocks. It really depends on what type of title the lender is willing to accept.

Basically, a title loan transfers temporary possession of the title to the lender, who holds such a title while the borrower continues to make use of the property covered by the title pending the time such a borrower repays the loan. Assuming the lenders fails to fulfill the terms of the loan agreement; the lender may take full legal possession of the property through the legal act of repossession. The advantages of a title loan vs. other loans include several considerations.

Ease of Obtaining Title Loans

One of the more easily recognized advantage of a title loan vs. other loans is the fact that borrowers can obtain a title loan much faster than other types of loans. So long as the borrower owns the property, the property has no other claims against it, and is not a subject of dispute; the borrower may be able to obtain a title loan within a matter of hours. Such an expeditious processing of a loan application may come in handy when the borrower needs the money urgently.

On the contrary, other types of loan applications may take days, weeks or even months to go through, depending on the type of loan the borrower is seeking. Lenders often need this time in order to conduct a thorough background check of the borrower to ensure that they will get their money back.

No Credit Check

Another inclusion in the advantages of a title loan vs. other loans is the fact that a typical title loan does not require a credit check. This may be good news to borrowers who do not have good credit, have no credit history, or have a very minimal credit history. Usually, such people will not find it easy to obtain other forms of loans based on their poor credit records. Title loan lenders feel more comfortable granting loans to borrowers because the title to the property serves as collateral that they will receive their money back, one way or the other.

Use of Property

Those who obtain title loans may appreciate the fact that they can continue to use the property pending when they repay the full amount. As such, a borrower who obtains a car title loan may still continue to use the car until he or she repays the loan. Some loan arrangements may require the borrower to physically give up the use the use of the property until the loan has been fully repaid. As such, title loan offers the borrower several advantages over other types of loans.

by: John Smithes

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