February 4, 2012

What You Need to Do to Obtain a Car Title Loan

A car title loan can be a handy source of emergency cash in less than an hour if you are willing to utilize your auto title as collateral. This kind of emergency loan is well-liked, particularly for those who have not yet established a credit rating or those who have poor credit ratings.

Car title loans may also represent the only way for people who do not have the time to wait for the longer processing time of standard loans. Another advantage is that the loan values could be much smaller than those provided by conventional lenders, such as banks.

It should be pointed out that the available amount from a car title loan is usually half of the resale value of the motor vehicle but some loan companies may provide a maximum loan amount that is larger than 50 percent of the vehicle’s market value. An important prerequisite for people to qualify for a title loan is that they should have complete ownership of the car. Therefore, the auto title should show that the borrower is the owner of the vehicle and that there are no unpaid loans that utilize the car title as collateral. The loan company may also require that the vehicle should be in good running condition and that it does not have dents and scratches that may compromise its resale value.

The car loan company may also require documents that will prove the identity of the borrower and the place of residence. The borrower will also need to demonstrate the presence of a source of income, which is usually through pay slips or an income tax return. After the car title loan company has confirmed the identity, the presence of a regular source of income and residence of the borrower, it may then release the loan amount in as short a time as 15 minutes. Meanwhile, borrowers are advised to ensure that they are aware of the interest rate that will be used because this can greatly affect their ability to repay the loan. Thus, it is important to search for a loan company that offers the lowest interest rates that are available in your city.

It is advisable to spend some time searching for the companies that offer the lowest interest rates and fees. Meanwhile, some loan companies may permit a borrower to roll over the loan to the following month if he or she is incapable of repaying the loan on the specified due date. However, do not forget to check the interest rate because this is often pushed up whenever the borrower asks for a rollover.

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How to Apply for a Car Title Loan

A car title loan can be a convenient source of emergency cash in under one hour if you are willing to use your car title as collateral. Such a type of emergency loan is often sought after by people who have damaged credit ratings or those who do not yet have credit. Car title loans may also be the only source of funds for those who cannot wait for the usual length of time that is needed in the processing of standard loan. Moreover, these loan companies may provide loan amounts that are quite small. Such loan amounts are often considered by banks and other conventional finance providers to be too small to be profitable.

It is common for the available amount from a title loan to be 50 percent of the estimated resale price of the car. Some loan companies may even offer a maximum loan amount that is larger than 50 percent of the vehicle’s market value. It should be pointed out that it is vital for a person to completely own the car to qualify for a title loan. What this means is that the vehicle title should indicate the borrower as the sole owner and that there are no liens attached to it. It is also a common requirement that the car’s external appearance should not decrease its selling price and that its engine is in good running condition.

The vehicle title loan company will also want to obtain some identification and proof that the borrower resides in a particular address. Another important requirement is that the borrower should be able to offer proof of dependable income source. Normally, a pay slip or income tax return may be utilized as proofs of income.

After the car title loan company has verified the identity, residency and the presence of a regular income source, it may then release the loan amount in as short a time as 15 minutes. It is advisable for the borrower to check the interest rate that will be applied for the loan because this can have a significant impact on his or her capability to repay the loan. It is therefore prudent to look for the finance company that offers the lowest interest rates in your area.

Do not forget to shop around for companies that have the lowest interest rates and fees. Meanwhile, in the event that the borrower is unable to comply with the payment deadline, some companies may also allow him or her to roll over the loan for another month. However, it is also important to check the interest rate because they usually increase it when you roll over a loan.

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