At some point, you may find yourself in a position where you need some money in a short time. People looking for quick cash often turn to car title loans. If you need quick approval on a short-term loan, car title loans around of your options. The problem with car title loans is that they tend to be quite expensive. You can only get a car title loan if you are willing to pledge your car as collateral. You are required to hand over your car title to the lender until your loan has been fully repaid. A car title loan only makes sense if you do not have any other options during an emergency such as if you need money for medical expenses. However, car title loans more expensive than they are worth, and you face the risk of losing your car when you get one.
You need to have enough equity in your car to fund a loan to borrow against your vehicle. It is a requirement by money lenders that you have the use of other loans used to buy the vehicle. However, other lenders you still allow you to borrow a car title loan even if you are still servicing a standard auto purchase loan. The value of your car for the equity you have in the vehicle determines the amount you qualify to borrow. You get to qualify for a higher amount if the car has the higher value. Lenders do not want to struggle when it comes to repossessing and selling the vehicle to get back their money, and they, therefore, do not offer the full value of the car. The loan amount usually varies between twenty-five and fifty per cent of the value of the car.
Car title loans are available through storefront finance companies, credit unions, and banks. You can get better deals by applying through a credit union or a bank. They may have longer pay off periods going up to five years and varying fees. With most lenders, you get a payoff period of fifteen to thirty days.
If you have problems facing the loan amount and the interest within the specified time frame, you can choose an option that allows you to roll over the loan. This option automatically qualifies you for a brand new thirty-day loan instead of repaying your current. Every time you rollover the current loan, you pay new loan fees which makes it an expensive option.
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