Car Title Loans: Choosing the Right Financial Service

Car Loans

How is this a good investment for both the borrower and the title loan company? It is an excellent investment for the borrower. This is why: at this point in time, let’s assume the borrower is in some kind of financial disposition. That means the borrower may have lost their job, can’t afford to pay their rent, may need money for their child’s school tuition; there could be a number of possibilities why the borrower is in search of instant cash.




Let’s look at the other side of the spectrum. How is this a good investment for the loan company? If we scroll back to the first few sentences in this article, we can see that the title loan company “uses the borrower’s vehicle title as collateral during the loan process”. What does this mean? This means that the borrower has handed over their vehicle title (document of ownership of the vehicle) to the title loan company.




Car Title Loans: The Pros and Cons

It is very helpful to analyze the pros and cons of a car title loan before you decide to take a loan out. Learning about your financial investment before you finalize anything is a great financial tool for success. A borrower must consider their options fully before making a decision.

During the loan process, the title loan company collects interest. Again, all companies are different. Some companies use high-interest rates, and other companies use low interest rates. Of course, nobody would want high interest rates, but the loan companies that may use these high-interest rates, probably also give more incentives to the borrowers. What are the incentives? It depends on the company, but it could mean an extended loan repayment process of up to “x” amount of months/years. It could mean the loan company is more lenient on the amount of money finalized in the loan.

The Pros of Car Title Loans

The most clear-stated pro would be the advantage of receiving instant cash. Anyone could walk into their local 7-11 or convenience store and purchase a state lottery ticket. That process is extremely easy; however, the probability of receiving a large amount of cash instantly is extremely low. The probability of receiving instant cash at your local auto loan company is extremely high. Unlike traditional banks and credit bureaus, another advantage of the car title loan industry is NO CREDIT CHECKS. Most of the time, borrowers come to tile loan companies because they’re stuck in financial situations.

Their credits scores are usually poor at this point after collections have had to continuously make adjustments because they couldn’t pay their bills on time. That is a major “Pro” for a car loan company.

Depending on the borrower’s vehicle value, the borrower can receive up to whatever the maximum the loan company may offer. Some loan companies offer up to $100,000 and others may offer lower loans of up to $5,000. Obviously, if the borrower is driving a Mercedes or BMW they will be looking at a larger loan value, but every title loan company is different.

The Pros of Car Title Loans

The most clear-stated pro would be the advantage of receiving instant cash. Anyone could walk into their local 7-11 or convenience store and purchase a state lottery ticket. That process is extremely easy; however, the probability of receiving a large amount of cash instantly is extremely low. The probability of receiving instant cash at your local auto loan company is extremely high. Unlike traditional banks and credit bureaus, another advantage of the car title loan industry is NO CREDIT CHECKS. Most of the time, borrowers come to tile loan companies because they’re stuck in financial situations. Their credits scores are usually poor at this point after collections have had to continuously make adjustments because they couldn’t pay their bills on time.

How long does the application process take? The simplicity and speediness of the application process is another “pro” or advantage for the car title loan. The average online application just asks basic personal questions pertaining to the borrower’s vehicle, and location. The application roughly takes about a minute or less to complete. Most companies get back to the borrower within a few minutes of submitting an application. Once the loan representatives read through the borrower’s application information, they quickly give the borrower a call based on the number provided in the app, and go over the details and process of obtaining a loan.

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