What is Car Title Loan and How Does It Work

A car title loan is a financial benefit that gives you the option to apply for a loan if you own a vehicle for a set period, usually a maximum of 30 or 60 days.

This financial benefit is a good way to find money easily and gives you the possibility of having an important monetary figure for a few days and allows you to solve economic situations that arise in an emergency.

In this guide, you will know everything about its operation, how much they could offer you for your vehicle, as well as much more information that may be of interest to you. Keep reading and you will solve all your doubts regarding these loans.

 

How Does a Car Title Loan Work?

A car title loans guarantee your payment with the vehicle, this means that they are backed by it in case you default. When talking about a guaranteed loan, it is not only restricted to vehicles, you can usually ask for them on other types of things, such as boats, a motorcycle, and a van. Although they are very useful to solve a momentary situation, the fact that they must be paid for a fairly limited period can be dangerous.

 

How Much Can They Lend You for Your Vehicle?

Normally, they can lend you an average of USD 30,000 to more than USD 800,000 for your car. However, lenders can charge you anywhere from $10 to $30 for every $100 loan, and an APR is typically more than 390%.

 

Can You Get a Loan for Your Vehicle Without Leaving It?

There are loan companies for your vehicle title where you only pawn the documents of your car, however, they place a GPS so that you can move around calmly, then when you finish the contract you get your papers again.

Normally, this is done with model vehicles that are not older than 12 years and that are in good condition.

 

Main requirements that they will ask you to be able to acquire a loan of this type:

  • Vehicle purchase invoice.
  • Up-to-date payments of your taxes.
  • Circulation card.
  • Updated and paid home service receipts.
  • Your ID.
  • A duplicate set of your vehicle key.

 

How to Mortgage A Vehicle?

The mechanism to request a car title loan can be different depending on the bank or financial institution where you make the request, it is normally a quick process without much paperwork.

After making your application, those in charge of processing it will review all your papers and will take into consideration the number of loans you have requested and the conditions to make the payment, they will also explain what the monthly installments you have to pay will be like.

After you have reached an agreement on the payment method, you must give the title of your car and you will obtain the loan.

Also, you have to have all the documents in an orderly manner, this way it will be faster for you to obtain them. Having fulfilled these steps, the approval form will be simple and you will not require verification of said credit.

 

Frequently Asked Questions

 

Are our car title loans useful?

A car title loan is quite useful because it allows you to solve situations in the short or long term, where the guarantee will be the title of your car.

To make the request, all the owners of the vehicle must go and your name must appear on the document if you do not pay it, you will no longer be the owner.

 

Can I apply for a loan without a bank account?

Yes, some companies give you the option of requesting a loan without having a bank account.

This is considered an unusual loan today, to do so you must find out what the process would be like with this, you have to talk to the lenders and ask all your questions about it.

 

How dangerous is a title loan?

Some people consider these types of loans quite risky because they have a higher interest than other financial products such as credit cards.

Therefore, it is best not to ask for it unless it is very necessary and pay it as soon as possible, there is a high risk that you will lose your vehicle if you do not make the payments that you already had planned.

 

Why take out a car title loan?

Normally this type of request is much simpler and faster than making it at a financial institution, the latter will take longer to process and will ask you for more requirements, in the end, you will not be able to obtain the cash you require promptly.

 

Read More: List of Services You Can Access from an Online Mortgage Service