People in case of any emergency may want to opt for racing for the shortest path for immediate cash flow. Well, that may sound reasonable, but many a time, the process may have a larger screen to share with your financial terms in futures. Opting for a quick loan can undoubtedly keep up to your present expenses, but can it really be useful and profitable in the long run?
Indeed, that what is the matter that you will be dealing with in this stance. An auto title loan, also called a “pink slip loan,” is a typical short-term loan that requires the borrowers to lend money for an exchange of their vehicle. The customers offer their vehicle as collateral against the outstanding loan repayment amount. If you are thinking of the interest rates that rule this exchange, beware, it can be outrageously high.
In the past, most Americans only turn to loans to settle enormous purchases like houses, cars, and vacations, among others. However, because of the present-day economic crisis, many turn to them to pay for home repairs, medical expenses, and other expenditures that were previously quickly settled.
Despite the availability of many loans out on the market, many are still unable to avail them because of bad credit rating. It is a good thing, though, that is an exceptional option for those who affected by the said drawback: auto title loan.
Auto Title Loan Explained
An auto title loan is a lending option that allows the borrower to utilize their car title as collateral. Financial institutions that offer the said loan do not bother to check the borrower’s credit rating. As such, it is ideal for those who have a negative credit rating.
On the other hand, the decision to release the funds is based on the market value of the car that will be used as collateral. Putting this factor into consideration, a borrower who has a car that is in pristine condition can obtain a very high loan amount. Before going to uncover the various aspects of auto title loans, understating the strategy behind its working can be an excellent idea. Scroll down to contemplate with the working of the auto title loan for better know-how for deciding the best for you.
How does the auto title loan works?
In the first case, knowing the eligibility criteria for qualifying for an auto title loan is essential. You can be eligible for the auto title loan; you must legally have your vehicle in your name. You may have to present a lien-free title to the lender for your vehicle. The documents that would ease up your way can be range from those current vehicle registrations, residency, valid identification, proof of insurance, and your income statement. Apart from that, some lenders may also demand the keys of the vehicle for security reasons. Moreover, some may insist on installing various GPS- tracking devices to avoid fraud deals.
Now, you may be thinking about the amount that you may get in place of your vehicle. Well, the amount depends on the value of your car. Indeed, that makes sense, right? The amount is usually capped at a price of half the worth of your vehicle’s price. The auto title loans are generally short term loans, typically around 15-30 days. Contrastingly, if you are running out of money and need urgent cash flow to pay your bills, you can consider this option. Well, effectively, these loans are somewhat better than those of the payday loans.
The working of the auto title loans can be explained with the help of an annual percentage rate (APR). Interestingly, the APR is the rates that are much higher from those traditional lending rates as given by the financial institutions. The auto title loans are notoriously expensive as they are capped by various limited financing alternatives. Get yourself a pen and a paper to understand it more profoundly.
Suppose you took an auto title loan of $1000 with a monthly interest of 25%, how much you have to pay at the end of the month? Well, you will be paying a whopping amount of $1250 in just 30 days. Remember that these fees are in addition to the lender fees that you will be incurred with the first step for finding a one for yourself! In the present scenario, fortunately, if the auto title loan does not blend with your current financial terms, no need to worry. There are numerous other functional alternatives to auto title loans in the market available in easy steps.
Before exploring them, get in to know the capped benefits for opting for an auto title loan and understand the various terms with a profound approach.
Auto title loan made easy!
Fast and Easy Application to Approval Procedures
An auto title loan is an excellent option for an individual who needs cash and owns a vehicle that is in good condition. Since there are no credit checks, no background, no long approval procedures, the said loan is ideal for those who need cash in the soonest possible time.
In fact, some individuals apply for an auto title loan in the last minute to settle emergency medical procedures, home repairs, and other expenses that cannot be prolonged.
A borrower who is busy with work or home tasks can even apply to their home’s comfort. This is because many lending institutions offer online loans where an individual simply needs to fill up an Internet-based form and then drive their car to the office of the lender for inspection. This makes it easier for the borrower’s part. Some companies even send their personnel to go to the borrower’s home to check the vehicle.
Before striking the best deal for your financial status, knowing and understanding the numerous alternative for auto title loans can be effectively sound. Explore the various options that can substitute the decision for a quicker process.
Credit card cash advances
Although the credit card expenses can be highly expensive, they still boost of an interest rate that is still below those spiking triple digits. You can consider this option if you have a credit card, a line of credit(LOC), and income that can have those cleared within the next several weeks. These can be far less expensive than those of the auto title loans with a standard interest.
How about opting for a loan that is regulated by the investors and not by the banks? Indeed, that can be something amazing. Typically, the approval rates of this type of loan are enormously higher than those of the bank loans. Meanwhile, you can find the interest rates to be much lower. So, this can be one of the potential reasons for getting into peer-to-peer loans.
Like other forms of loan, an auto title loan can be a good option in emergency times. The only difference is it is a lot easier to obtain than other conventional loans. Because of this, such a financial option can be a life-saver in a country that is affected by the global economic turmoil.