If you have exhausted all the options of obtaining money, do not worry. There is one more option with you. It is your car. Confused? You can obtain a car title loan and get out of financial misery.
How does the Car Title Loan work?
It is easier and faster to get a car title loan when you own a car that's paid off. You will have to provide the car title to the lender. In return, he will provide you with money.
Various auto financing companies and lenders offer online loan approval. They take help of the internet to reach maximum clientele. Also, many lenders design software applications for mobile to allow you to see how much loan amount you will get for the car title.
The loan carries high rate of interest as it is a short-term loan. While approving the loan, lenders consider the value of your car instead of your credit score. It is possible that a few lenders may even require car insurance. The loan amount depends on three things:
1) Your car's value;
2) The amount of cash you need;
3) Your ability to repay the loan.
Thin Line of Difference between Auto Pawn Loan and Car Title Loan
If you apply for an auto pawn loan, you will have to provide your car along with the title of the car to the lender. He will keep the car as security. Under the auto pawn loan program, you will receive more cash since both the car and the car title are in the possession of the lender.
What happens if you are unable to make Payments?
If you are unable to make payments on the loan, you may lose your only car. However, the lender may allow you to keep the loan for one more month after the due date. The process is known as "rolling over" the loan.
If you are unable to make payments even after rolling over the loan, the lender will repossess your car. He will sell it in an auction to recover money. So, it is essential to pay off your dues in the specified time period.
A car title loan is one of the best options to get money when you need it the most! But, remember to create a plan for ensuring regular payments. And, once you have a plan ready, it will get you out of financial misery and save your car from repossession.