subject: Determine If A Car Title Loan Is Right For You [print this page] The maximum amount of the loan is determined by the collateral. Typical lenders will offer no higher than 30 - 50% of the actual appraised of resale value of the car, meaning that most auto title loans are "oversecured."
The repayment dues are made within 14 days to a month of the loan on being issued where the borrower has to repay the entire amount of the loan plus fees in one lump sum.
Bear in mind that if you are unable to pay off the loan amount, there is a provision of rolling over the loan repayment for another payment period where it carries a large interest payment against the loan from defaulting, or the lender will come and take the car, sell it, and keep the money from the sale.
Since annual percentage rates for auto title loans are marginally very high - depending on the state where the lender is located, interest rates typically range from 36% to as high as 651.79% (APR) For lenders title loans are a very low financial risk, typically the loan amount is far less than the value of the automobile.
On the other hand, it can be a very high financial risk for the borrowers, especially those who borrow more money than they can actually afford to pay. Remember, a single missed payment on this title loan could result in your car being repossessed at anytime.
If your car is seized, any additional funds obtained from the selling of the vehicle is also retained by the lender. Depending on your circumstances, auto title loan is a convenience way to get hold of cash fast.
Just the only thing you need is to pay back on time. Otherwise, when you default on the loan, the car would be forfeited and sold to resettle the balance of the loan.
If the sold value of the car is less than what it's owed, you're still obligated to pay the difference. For this reason alone, it's important that you weigh the pros and cons and decide if automobile title loan is really the best available option.
If you decide to complete the title loan, be cautious. Read the contract in detail before signing on the dotted line and completing the process. The eligibility criteria for automobile title loans are given to anybody for long as they own a vehicle.
For those with history of bad records about previous loan processes, you need not to worry since it does not count. Moreover, the loan amount is determined by the existing value of the vehicle only. Other criteria of eligibility include: The age of applicant should be 18 years as per US lenders criteria.
He/she should be a US citizen. The social security number is necessary to get the approval. The applicant should have a job with a salary account in US bank. While poor credit score is also acceptable, he should not be bankrupt.
Typically auto title loans does not take too much time for processing. All you need to do is just walk into a loan agency or do it easily by completing out the form through the internet and the loan application will be processed within 24 to 48 hours.
Common among title loans, lenders loan up to 50 percent of the value of the vehicle, which takes care of any depreciation in the price of the car over the repayment period.
Bear in mind that there are few things to remember after qualifying and granted a car title loan. This type of loan can be a very high financial risk for the borrowers, especially those who borrow more money than they can actually afford to pay.
Remember, a single missed payment on this title loan could result in your car being repossessed at anytime. If your car is seized, any additional funds obtained from the selling of the vehicle is also retained by the lender.
With this, qualifying for a auto title loan is a real blessing in times of great need and it assures the help you need for specially when faced with a major financial crunch.
