Title Loans – The Pros, The Cons, and More
What is a title loan?
Every American has heard about title loans. But what are they really? Are they loans that have a title? Close but not exactly. A title loan is a borrowing that requires collateral. Okay, got it! Now, what is collateral? A personal asset, such as a car or your house that backs up your loan. In case of failing to repay the loan, the lender may take the collateral away. It sounds scary at first, but it’s not all that bad at all. Here’s why!
The pros and cons of title loans.
Title loans are popular because they allow you to borrow money with no credit score. The lender doesn’t care about your credit history because you put up your asset as a backup to the loan. Now it is your responsibility to pay it off in order not to lose it. No matter your credit score, direct lenders can approve you for a title loan.
Another benefit is the short approval process. The application and the approval are usually quicker than the one of bank loans. Moreover, unlike traditional loans, a title loan can give you an amount as low as $100. Usually, a title loan lasts from 15 to 30 days but can be longer if approved by the lender. You can repay a title loan in one payment at the end of the term or multiple installments over a longer period.
The most popular title loan is a car title loan. It means that the car is the asset you put up as collateral. To take a car title loan, you have to own a vehicle. The lender usually lends you ¼ of the car’s price. At the same time, the lender keeps your vehicle as collateral. If you fail to repay the loan on time, the lending company becomes the car owner, and you lose it.
A title loan can save your day when you have an emergency expense awaiting. Nonetheless, make sure you can pay off the lender on time. Try to do it as soon as possible to avoid paying extra fees or losing any of your assets! For further information, don’t hesitate to contact us today!
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