3 Things You Should Know About Title Loans
No one likes to be in a position where they need to take out a loan to afford to make certain payments. That being said, should the occasion arise where you require a loan, you have several options available to you. One of those options is that of the title loan.
Typically, a title loan is a type of loan where the title of one’s car is used as collateral. These loans can provide funds when those situations arise that send your financial situation spinning a bit. There are a few points that many people don’t understand about these loans, though. Here are three things you should know about title loans if you are looking to explore your loan options.
1. You Keep Your Car While You Repay the Loan
When you take out a title loan, you don’t have to surrender your vehicle to the lender. Rather, only the title of your car is handed over as collateral. You will continue to drive your car as usual throughout your loan repayment process.
Lenders like title loans Albuquerque will factor the value of your vehicle into the loan and assess your ability to repay using your credit history. Once you have completed all of your payments, then your car title will be returned to you.
2. You Can Use the Title of Any Vehicle that You Own
You don’t necessarily need to use the title of your car to take out a title loan. Rather, the title of any vehicle that is in your name will suffice as collateral for your loan. If you need a smaller loan and the value of your motorcycle is sufficient enough to get you the amount that you need, then that will work just fine. Again, you only need to hand over the title of your vehicle as opposed to the vehicle itself.
Oftentimes, something like the title of an RV or motorhome is preferable as these vehicles can be worth much more than a car. In this way, you might be able to secure a more significant amount for your loan.
3. The Process Is Quick
One of the aspects of title loans that makes them so appealing to borrowers is the fact that you can get the money you need fast. Similar to a payday loan, title loans are processed quite quickly so that you can have your cash within the same day that you apply. The repayment timeline is also generally shorter than other loan options with many lenders looking to have the loan repaid within a month or two.
Bear in mind that because this is the case, title loans tend to be expensive. This is because of higher interest rates that, over time, can add up quickly. The interest for your loan might be simple or compound depending on the lender you use. Make sure to stick to your repayment schedule or even pay the loan off early if your lender will allow it without penalties.