When you are in need of cash and fast and do not have a very good credit history, then a title loan can provide a good way of getting some much-needed funds. For deals on the best online title loans, follow the link. These types of loans work via the use of a vehicle title, which acts as a form of collateral against the loan. They are offered to consumers as a means for money to be borrowed for the purpose of covering short-term or emergency expenses.
Understanding title loans
These loans are very similar to payday ones in that they do not require you to have any sort of credit requirements. In fact, the vast majority of financial institutions that offer these types of loans do not even bother with checking your credit at all.
This is because the loan is secured against the title of your vehicle, whether that be a motorcycle, car, or van. Depending on the financial institution, the approximate value of your vehicle, and whereabouts in the country you live, you can borrow anywhere between 100 dollars and 10,000 dollars.
The financial institution will hold the title of your vehicle until the entire loan amount has been paid back to them. Even though there is collateral in place for the purpose of securing the loan, they are still a more expensive alternative to other types of loans.
Because of this fact, title loans are actually banned in many states throughout America. Those states where they are allowed though include Wisconsin, Alabama, Virginia, Arizona, Utah, California, Texas, Delaware, Tennessee, Florida, South Carolina, Georgia, Ohio, Idaho, Oklahoma, Illinois, New Mexico, Louisiana, New Hampshire, Mississippi, Nevada, and Missouri.
How they work
An application for a title loan can either be done in the store of the financial institution or online on their website. The amount that you can borrow varies from anywhere between 25 percent to 50 percent of the total value of your vehicle. You need to own the vehicle outright, be free from any outstanding finance on it, and have the title for it in your possession.
As part of the application process, you are required to take your vehicle, along with some proof that it is insured, the title document, and some ID, to the financial institution that is loaning you the money. In some instances, you are also required to bring a spare set of keys if you have any.
Although in an odd couple of states the financial institution will go through a credit check with you, in the vast majority of them, this is not done. Additionally, there is no checking of your income status nor if you have the ability to pay the loan back. Once the contract for the loan has been signed, you will get the money and you do not get your vehicle back until it has been completely paid back with interest. During the repayment term, you are still able to use and drive around in your vehicle.