What can you do in a situation where you urgently need to raise funds? You can apply to your bank for a loan. However, the process requires lengthy paperwork, which may not be ideal if time is critical. In such a situation, a car title loan provides a good option to arrange quick cash.
Car title loans are instant loans that you can get by pledging the title of your car as security against the loan amount. The good news is that, in contrast to the procedure for taking bank loans, these loans require minimal paperwork and take very little time to process.
The downside is that car title loans carry high interest rates, mainly to offset the risk involved to lenders. If you intend to apply for a car title loan, there are some important things you need to know:
1. You need a clear title. You can avail of a car title loan only if you are the titleholder of your car.
2. You can borrow against the value of the car. A car title loan lets you borrow an amount up to the resale value of the car. Thus, if you are borrowing against a new car, or one that is in good condition, you will get a higher amount than if you are borrowing against an older car.
3. Car title loans are ideal for emergencies. Car title loans are approved almost instantly, allowing you to get the money within 24 hours. These loans are, therefore, good for emergencies.
4. They have a short repayment period. Car title loans are usually available for short periods ranging from 15 to 30 days. You are expected to pay back the loan amount by then.
5. They carry a high roll over rate. If, for any reason, you do not repay the loan amount within the specified repayment period, it is carried forward to a further date. However, every time you allow your loan to be carried forward, the rate of interest is hiked.
Alisha Delphi holds a degree in Economics and Commerce from USC. She started out as a financial advisor with a bank and has moved on to become a loan consultant with more than ten years of experience. Her key areas are auto title loans,
auto pawn and fast cash loans.
