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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