A vehicle title loan seems like it might be up your alley, but you’re harboring some misperceptions about such loans that are holding you back from their many benefits. We don’t want that to happen, so to help you, here is the truth about car title loans.
The Issue
Title loan companies – reputable ones, at least — are good to have around if you need cash quickly. Be it to take care of legal issues, make a repair, or fund unexpected travel, a title loan can really come in handy. However, there are myths circulating about such loans that may make you hesitant to take one out. Some of these untruths are simply due to misinformation. In other cases, traditional lenders and other competitors are deliberately spreading these misperceptions.
What is a Vehicle Title Loan?
Let’s start here. A vehicle title loan is a secured short-term loan that uses your vehicle as collateral. In other words, while you can still drive your car while making payments, you must hand over your car’s title until the loan is repaid.
Misperceptions Regarding Car Title Loans
Let’s clear up a few of the top myths regarding such loans:
Title Loan Interest Rates are Sky High
Too often, people consider title loans as being in the same category as payday loans and other kinds of short-term loans for which you will fork over exorbitant interest rates. The fact, though, is that title loan interest rates vary widely, depending on the lender. So, it’s good to shop around for the best rates available.
Vehicle Title Loan Companies are Shady
This scuttlebutt arises from the fact that some lenders, like those in other financial industries, are less than scrupulous. Such title loan lenders, who seek to take undue advantage of people’s vulnerabilities, will hit you with inordinately high interest rates and predatory terms. You can search for “title pawn near me” and ask how each lender structures their interest rates and repayment terms to avoid any hidden pitfalls. Taking the time to ask questions upfront can help you find a reputable lender and protect you from unfavorable loan conditions.
These bad actors are in the minority, which is no consolation to you, we realize, if you sign on with one. We recommend that you go with a reputable title loan lender such as ChoiceCash, which is serviced by LoanMart. Find it by clicking on car title loans near me.
You Won’t Get Enough Money
This is more applicable to payday loans, which typically go as high as $1,000 (due on the borrower’s next payday, by the way). Car title loans, which typically equal between 25 percent and 50 percent of your vehicle’s value, can reach $10,000 or more. Further, repayment is made through installments. You needn’t pay the loan off in one fell swoop.
In all, how much you can get from a title loan depends on your vehicle’s value. That is, the more valuable your vehicle is, the more you will be lent. If the amount is still insufficient, if you have a second car, you can likely use it to take out a second loan.
It’s Difficult to Qualify
This is a serious misperception, since all you really need is a vehicle that you own free and clear, and proof of income. You also may need to show proof of residence. That’s it. There’s no credit check, so no worries there. In fact, the whole process is simple, and you can apply and be approved in minutes.
Ultimately, the truth about car title loans is that getting one can seem like a miracle when you need cash right away. Banks, with their slow approval processes — IF you can qualify – aren’t much help in an emergency. Another truth is that, with payday loans, payment is due in full when you get your next check. By contrast, you have repayment flexibility with title loans. So, don’t let misconceptions keep you away from the fast help you need.