As much as our lives have changed in the wake of the recent economic downturn, the fact still remains that we need money in our everyday lives. In fact, whether they are bills or unforeseen emergencies, these economic troubles have only made it more difficult for many of us to manage and simply get by. Because so many of us have accordingly taken serious hits to our credit, if obtaining a loan to help take care of these things is even possible, doing so is certainly more difficult than ever. As such, alternative means of obtaining loans, like car title loans, are becoming increasingly popular for people in need of money.
As the name suggests, a car title loan is a loan in which the title of your car is used as collateral security for borrowing various amounts of money. Unlike the majority of traditional loans, which use your credit history to determine your ability to repay them, car title loans depend on your car’s value as the primary instrument guaranteeing that the loan will be repaid. However, these loans do tend to have relatively higher interest rates and are usually for shorter periods of time, primarily because the value of cars depreciates every day, as well as each time they are driven. Still, with the lack of credit checks, as well as the guarantee of repayment, these loans can often be obtained in less than an hour and can be as little as one or a couple hundred dollars.
Of course, there are binding terms to car title loan agreements, the most important of which is that the borrower must be the actual owner of the car, without any outstanding balances or liens. Also, these loans just about always require you to have full insurance coverage on it, though there may be a few exceptions in some states or regions. This stipulation is very important for lenders because you will still be able to continue using the car as you normally would, although you have to hand the actual title over to them. If the lender ever needs to claim the car as a result of your inability to repay the loan, this will give them sufficient assurance that the condition of the car, and thus its value, is sufficiently protected.
Though easier to obtain than traditional loans, car title loans should never be taken lightly since the consequences of failing to pay it back are quite serious, especially if you are having any kind of financial challenges. Clearly, the fact that your financial situation requires you to take out a loan most likely means that it would be considerably difficult for you to replace a car if the lender happens to take it away. Fortunately, many states do require lenders to hold the vehicle for a specified amount of time before they can sell or auction it, allowing you the opportunity to pay whatever is owed on loan. In the end, the most favorable outcome for both you and the lending institution will be to repay the loan according to the terms you agreed upon, if not sooner.
In the midst of struggle, we can sometime come to realize that we have more options available to us than we might at first think. Similarly, even if your credit is not accepted at banks and traditional financial institutions, you still do have other loan options available to you. In those times you need a bit of financial help, a car title loan could very well be that relief. Visit the car title loan website if you have questions.
Guide To Title Loans 