What Are Car Title Loans?
Have you tried to acquire a loan only to be rejected because of a bad credit score? There are several instances in life when car title loans can come in handy. Also known as auto title loans, buyers can take out a quick and easy loan, using their vehicle as collateral.
Imagine that you need cash to remodel your home, pay for a wedding or repay an urgent debt. Sometimes, the funds aren't immediately available when you need them, and another plan is needed.
A car title loan can be your saving grace. Understanding the mechanics of a car title loan, as well as the pros and cons, can help you make an educated decision.
What Is A Car Title Loan?
Car title loans offer a way of lending money that allows individuals with a bad credit score to secure the funds that they need. The money is loaned as needed, and the borrower's vehicle becomes collateral for failed payments.
Often associated with subprime lending, car title loans usually involve steeper interest rates because of the higher risk of default. At Rapid Auto Loans, we strive to support the payment process by offering longer periods of time to pay the money back without added stress.
How Does A Car Title Loan Work?
If you have a bad credit score or struggle to manage money effectively then a car title loan is a solution. Different lenders will have varied nuances, but all follow a similar process.
Vehicle Ownership
The first requirement is that you own your own vehicle. This asset will be used as collateral for the lender.
Title Loan Application
Next, a car title loan application needs to be filled out whereby proof of ownership and driver's license needs to be validated.
Get Quick Cash
Once approved, the money is transferred by the lender, allowing you to turn your car into cash - and still drive it.
Normally, the loan needs to be paid back to the lender within 30 days as a single lump-sum payment. This value will include interest and fees.
At Rapid Auto Loans, we offer a quick approval process without the need for employment verification and no pre-payment penalty. We also offer a 12-month-contract that makes the repayment process less stressful and more manageable.
Pros Of Car Title Loans
There are several reasons that a car title loan is such a popular option, especially for people who have no credit score.
No Credit Check
If you have a bad credit score or no credit score, then many lenders may refuse to loan money. This doesn't help when in desperate need of cash. Most auto title loans don't require a credit check, bypassing this step.
Quick Access To Funds
Without the need to verify a credit score, the approval process is quicker. In most instances, it can take a few minutes to review an application and ownership of the vehicle. After approval, the funds can be made available immediately (or within a few days).
Make Use Your Collateral
In order to qualify for a car title loan, you need to own a vehicle or at least have equity in one. This vehicle is then put forward as collateral for funds and can be repossessed if payments fail. However, if you make your payments then you continue to benefit from your asset.
Details To Be Aware Of
In many instances, a car title loan is not the first option for getting cash. That's because there are certain drawbacks if not managed correctly. It's important to understand these risks and ask questions so that you can effectively manage your loan without losing your vehicle.
Higher Interest Rates
As bad credit is accepted, the interest rates of car title loans are typically higher. At Rapid Auto Loans, interest is only charged for the time your loan is outstanding and monitored by the State of Florida (an APR of less than 30%)
Short Repayment Terms
Normally repayment is required within 30 days. At Rapid Auto Loans, we offer 12-month contracts to repay outstanding debt
Possibility of Repossession
Using your vehicle as collateral puts it at risk of repossession
Get A 12-Month Car Title Loan Today
Rapid Auto Loans offers a unique lending process, allowing people to unlock the equity in their vehicle without a credit check, and still drive the car. Without the pre-payment penalty, borrowers only pay interest for the time that the loan is outstanding.
We understand that life happens and so we also offer a 10-day grace period on every single payment. Ready to take out a car title loan? Give us a call at 954-678-5781 or fill out an online application today.
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