Auto title loans certainly are a quick and simple solution for some situations when you need cash quickly and especially if you have credit issues which leaves few other borrowing solutions for you. However, before you choose to risk your vehicle using auto title loans, read these tips first. You could avoid some potentially very expensive mistakes if you know what to view out for.
How Auto Title Loans Work
If you have an automobile, you can set up the title up as collateral and get a loan on the basis of the value of the car. For instance, many companies which provide these kinds of loans will allow you to borrow around 50% of the value of one's automobile. So if you own an automobile that's worth $5,000 you could be able to put the title up as collateral and secure a loan for around $2,500.
However, if you're still making payments on your vehicle, the amount of your auto title loans will be determined instead by the amount of equity you've in the car. For instance, if your vehicle is worth $5,000 and you still own $2,000 then the lender will determine the amount of your loan utilizing the $3,000 of equity you've in the car.
The great thing about these kinds of loans may be the lenders generally don't need a credit check because they have your vehicle title as collateral and security for the loan. Meanwhile, you can still drive your vehicle and repay the loan in payments. Of course, auto title loans do carry a pursuit rate which is determined by the lender whenever you fill out the application. Remember that interest rates and terms may differ widely among auto title loan lenders.
It's also important to keep in mind that if you use one of these simple types of secured loans, you will need a policy for how you're going to cover the amount of money back. This is really a loan which you can't afford to default on. If you can find other choices for you really to get a loan with bad credit, make sure that you see those as you're considering whether a car title loan is the best answer right now. Other quick cash type loans include; unsecured personal loans, payday cash advance loans, guaranteed payday loans, fast business loans and secured personal credit loans.
Auto Title Loans - Avoid Costly Surprises
As you are trying to find a car title loan company, it's crucial that you research the company's reputation and be sure that they have a history for helping consumers like you. Always compare at least 3 different lenders offering auto title loans and by all means request a copy of their loan papers to examine before you enter into any loan contract and read them carefully.
It is rather important that you read the whole auto title loan contract before you sign anything and be cautious for any extra fees and default clauses. Also review the loan terms and conditions carefully and pay consideration to the insurance requirements and know exactly what property you're pledging as security for the loan, (is it only your vehicle). In this way, there will be no surprises as it pertains to paying back your loan without hassles. Remember that lots of people using auto title loans are carrying this out as a final resort or as a quick term solution to get quick cash, and you certainly don't want to get associated with any financial lender who could make the most of your financial situation. You must always seek the services of other professionals for legal, account and tax advice before you sign anything.
With a little bit of diligence, you need to be able to locate several reputable companies offering the types of quick cash loan that you might want and then you may be well on the road to overcoming your immediate cash needs. You will find several specialty car financing companies online Atlanta title pawn that specialize in providing auto title loans and you'll find these companies offer several choices because they network with lots of the largest auto finance companies across North America and even Canada. Remember an informed borrower is a smart borrower, best of luck to you.