An auto title loan is a type of credit in which the borrower uses his vehicle as collateral. In other words, if the borrower refuses to pay back the loan in due time, he has to forfeit his vehicle to the lender. If the borrower pays the money back on time, the car stays with him.
This article describes the auto title loan and steps to get instant cash using your car title.
How are Car Title Loans Different?
Auto title loans are different than normal loans for a couple of reasons. Firstly, they are short-term based, often with a 30-day deadline. Secondly, the interest rates are higher as compared to other forms of loans. Third, the lenders rely only on the condition of the vehicle instead of checking the borrowers’ credit histories. These loans can start as minimum as 100 bucks.
Steps to Getting a Car Title Loan
1. Seek a Reputable Lender
Depending on your state or location, seek a reputable lender. If you cannot find someone locally, look up online.
2. Gather the Right Documents
In order to secure the loan, you will need all the right documents. You will need your car insurance, ownership papers, registration, proof of residency, proof of income and a government issued ID. You will have to submit a copy of each with the lender.
3. Determine the Amount of Loan
The amount of loan that can be given to you has to be determined in collaboration with the lender. The lender will assess the condition of your vehicle, and then offer you a loan accordingly with high interest. Lenders typically decide the amount of loan equivalent to half of the vehicle’s resale value. The interest rates can range anywhere between 36% to 100%.
4. Make Sure the Automobile is Your Own
If you have your vehicle on a loan or a lease, you will not be entitled to an auto title loan. Before asking for such loans, you should have full ownership to the vehicle. Auto title loan companies will run a check on your vehicle, so you cannot sneak your way around it.
5. Pay the Loan on Time
Car title loans are very strict. If you fail to pay the amount of money as agreed in the contract, you will lose your car. You would also have to pay an additional monthly fee most probably, depending on the amount of money that you borrowed. Usually, there is a limit of $4,000 per loan at maximum.
The steps on how to get instant cash using your car title very easy, if you have the right documents and know what you are doing. You can click this website http://sandiegocarautotitleloans.com to find out more. If you cannot afford this kind of credit, try alternative resources instead.