When Cash Is Tight, Consider Your Car
That is where vehicles may be used to guarantee secured loans too
. Secured car loans, for example, offer borrowers money to help them purchase cars. In this scenario, either the new automobile or an older automobile may be used as collateral.
Therefore, secured car loans too may be termed as a title loan. Title loans are named therefore because of the lenders demanding the certificate of ownership of the vehicle, known as the title. The borrowers are therefore not restricted from making use of the vehicle during the period of the loan, because only title is held by the lender.
Title loans are normally taken for a shorter term. As is pretty much the case with other short-term loans, the title loans too are expensive owing to the higher interest rate. Title loans fulfill short-term requirements.
Instantly as the borrower gets hold of resources, he pays the title loan and recovers the title to his automobile. Though, a clear title on the vehicle is the prerequisite for such loans. More often this also helps in accelerating the process of approval of the loans.
These sorts of loans are customarily faster approved than the regular loans. As soon as a borrower approaches the lending company, the loan is sanctioned after making some mandatory checks regarding the credit history of the borrower, and whether he has a clear title to the automobile.
The borrowers must though know that inability to pay the title loan can lead to a permanent loss of the vehicle. Moreover the amount left after the paying the unpaid balance of title loan may be claimed by the borrower.
In that scenario the borrower may be asked to hand over the vehicle at a specified date and time, thus giving him an opportunity to remove his belongings from the car, that are not a part of the car pledged. The routine of obtaining assistance through title loans is no different from the other loans.
That is where borrowers have to be watchful for lenders who charge exorbitantly high rates of interest. It is of utmost importance that one must take title loans only from the licensed lenders who are authorized to offer these loans. What's more they may even undertake checks to ensure that these lenders have the necessary credentials to offer title loans.
A vehicle constitutes a significant asset and it cannot be risked to any deal without considering its various aspects- both positive and negative. In general an auto title loan is lent to a person on the basis of his/her title of the car and the amount of this loan is decided by the value of the car.
In case if you are not able to pay back the full loan or it goes in default, then the lender has the right to sell the car and recover the amount of the loan. It is worthwhile pointing that when you take this loan, you get the money in a very speedy manner.
Moreover for securing it, you can ask for quotes from different lenders. But before going in for it, it's your job to make sure that the interest rate is not too high and that you can manage the payments each month.
You can qualify for an auto title loan, in case if you possess the following documents: The title of your vehicle, your driving license, proof of your present address like an electricity bill, etc. and, proof of your income, either a pay check or income statement in case you are self-employed.
Apart from that auto loans can also be availed on a small, short-term basis, but the borrower has to secure it with his car. The lender puts a lien on the vehicle, and in case if the borrower is not able to return the car loan amount, the lender may confiscate it.
That's why, it is essential that there are no other liens on the car and it is completely owned by the borrower. When searching for the ideal new car loan, you must be aware of the extra cost involved in it.
Especially, if you are a first time car buyer, you are required to take into account all the extra and hidden costs. It is of paramount importance that you don't be tricked by fees or costs that the dealer or salesperson attempts to add, such as insurance or maintenance contract.
by: Jack Landry
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