5 Benefits of Car Title Loans and One Important Warning
Benefits of car title loans include ease, speed, and lack of influence from your credit score to name a few. However, one must remember that ‘easy cash’ is never truly easy and treat this method of financing as an extreme case aid that it is.
5 Most Important Benefits of Car Title Loans :
1. A quick source of cash :
The process of taking out a car title loan is so simple, you’ll have money on hand within a few hours. You won’t even need to collect any specialized paperwork to apply. The majority of lenders only require a simple form that you can complete in under 10 minutes.
2. Your credit score is irrelevant :
Any car owner can get this type of loan as long as their vehicle is worth more than the loan amount and they have a source of income. Your credit score won’t even be asked when applying for auto title loans.
3. Your car stays with you :
One of the most important benefits of car title loans is that you don’t have to give up your car after taking one. That’s why this financing method is so great as you won’t be deprived of an asset that you need to make money for repaying the debt. Note that you can even take out this loan in order to pay for car repairs.
4. Interest rates are lower than payday loans :
The majority of payday loans and various cash advances that are often used as a quick source of cash have very ‘unfriendly’ terms. That’s because those financing options are extremely risky for the lender as they literally give you money for free. You can get some idea of how ‘not cheap;’ those loans are from the PEW Charitable Trusts statistics. Car title loans, on the other hand, have default collateral, which is your vehicle. This enables the lenders to cut down the interest rates and make the overall terms more favorable.
5. Flexible payback schemes :
Paying off a car title loan will be easier than many other quick cash options because these plans are very flexible. Due to the collateral, lenders feel more secure and therefore are open to negotiations. You can definitely hope to get a long-term installment plan adjusted to your personal needs.
One Warning About Auto Title Loans :
First of all, you need to understand that this warning does not negate the benefits of car title loans in any way. Instead, like any warning, it’s here to remind you not to abuse the good thing that this financing offers. It’ might be easy to fall into the trap of ‘easy money’ illusion and take out a greater loan than you are able to handle.
To prevent this, you should consider your reasons very carefully. Do you need cash badly? Is your situation an emergency? When will you be able to get the money needed to pay off the debt?
Take out this loan only if your answer to the first two questions is ‘yes’. The last one is necessary to plan out the best payback scheme for your circumstances.
Read More :