According to recent surveys, well over 50% of Americans wouldn’t be able to cover an unexpected $500 expense if it popped up today. Sadly, many people don’t have that kind of money set aside in their bank accounts.
If you’re one of them and you’re suddenly in need of $500 or more, applying for car title loans might be your best bet. Using car titles is a great option for those who need to get their hands on cash fast.
So, what’s a car title loan, and how does a car title loan work? Those are the two questions you should ask yourself prior to putting in applications for car title loans.
Learn more about car title loans below and see if they might be right for you.
What’s a Car Title Loan?
Before we begin talking about car title loans, it’s important for you to know what a car title loan is. This will help you make a decision when it comes to taking one out.
Car title loans are loans that allow people to use their car titles as leverage when borrowing money. Anyone who owns a car outright and has the title for it can take out a car title loan if they want.
Even if you don’t have the best credit in the world, most car title loan companies will still extend title loans to you. The simple fact that you own a car will show these companies that they’re not going to lose money by working out a deal with you.
There are quite a few car title loan companies that have popped up on the scene in recent years. It would be well worth your while to check out what they have to offer if you’re in need of a loan right now.
Do You Need to Give Up Your Car to Take Out a Car Title Loan?
Unfortunately, there are a lot of people who don’t even consider taking out car title loans these days because of the misconceptions surrounding them.
There are a bunch of car title loan misconceptions floating around out there that have caused people to go in another direction when looking for loans. One of the biggest misconceptions is that people have to give up their cars to take out car title loans.
This is not true!
While you will be using your car as collateral to take out a car title loan, you don’t have to toss the keys to it to a title loan company. Instead, you’ll have to give the company your title and have them hold onto it until you’ve paid off your loan.
This means that you can continue to drive around in your car and use it as you normally would after taking out a car title loan. You won’t have to worry about being without a car for any length of time.
How Does a Car Title Loan Work?
Now that you know a little bit more about what a car title loan is—and about what it isn’t—it’s time to discuss how a car title loan will work. You’ll be happy to know that you won’t have to jump through too many hoops to obtain one.
Here are the steps that you’ll take when working towards getting a car title loan:
Find an experienced car title loan company that you trust
Provide the car title loan company with some basic information about yourself (your name and address, your employment status, your income, etc.)
Let a car title loan company know how much money you would like to borrow
Send a car title loan company information about your car and, if requested, allow them to take a look at your car
Receive an offer from a car title loan company and choose whether to take it or leave it
This entire process will often play out over the course of just a day or two. This makes it one of the easiest ways to get cash fast when you’re in a bind and need money in a hurry.
How Much Money Can You Borrow With a Car Title Loan?
The amount of money that you’ll be able to borrow from a car title loan company is going to vary. It depends on the condition of your car and its current value.
But generally speaking, you should be able to borrow at least a few hundred dollars from a car title loan company. Many companies go up from there and can provide people with loans totaling anywhere from a few thousand dollars to tens of thousands of dollars.
You’ll need to decide how much money you need to borrow ahead of time. You’ll also have to come up with a surefire plan for paying your car title loan back since you could put your car at risk if you default on a car title loan.
It’s important for you to keep a close eye on the loan terms offered to you by a car title loan company. Ideally, you want to work with a company that’s going to extend a low interest rate. You also want favorable repayment terms that will make it possible for you to pay back a loan in a reasonable amount of time.
Applying for Car Title Loans Has Never Been Easier
If you’re in a pinch at the moment and need to find cash fast, car title loans might be the best way for you to go. They can provide you with the money you need in no time at all.
Just make sure you understand what car title loans are and how they work before getting started. It’ll make the process of applying for a car title loan go so much smoother than it would otherwise.
Would you like to learn about other loans that might be a good fit for you? Read the articles on our blog to get more information on loans.