A Title Loan is also known as car title loan. The borrower in this type of loan pledges the car in this case as property that secures the repayment of the loan. The car serves as protection for the lender against any default by the borrower. Title loans are given on short-term basis, but attracting higher interest rate compared to other sources of credit by lending institutions. Credit history is not a requirement for the lending as the vehicle is already enough to secure the loan. To secure title loan it takes the shortest time to process as long as the car is availed as collateral.
There are some few requirements that should be adhered to for smooth processing. The property put forward as collateral should not be having any loans withstanding against it. The car should also have a valid insurance cover and the title should have the name of the borrower. In some cases, though rare, the lender may decide to verify that the borrower has other regular source of income or is employed. Borrower’s credit score is not of interest to the lender as a requirement. Lenders keep the car title papers and in some cases even request for duplicate keys to the car.
In title loan, the collateral determines the maximum amount the borrower is worth. Typically the lenders often offer up to half the resale of the property or even higher in some cases. Kelley Blue Book is in most cases used to determine the resale value of collateral property. Interest rates charged by lenders vary from country to country and state to state. Interest rates should be paid by the borrowers in due date of payment according to the schedules that also vary. By the end of the loan term the outstanding balance can be settled in a single payment. The balance can always be rolled over when the borrower is unable to pay the loan but produces a new title loan. However, governments regulate the number of times s borrower can roll over the loan. This is to avoid one to be perpetually remaining in debt.
Title loan lenders can always take possession of the car and sell it to offset whatever is owned by the borrower in case they cannot pay back the loan or has delayed with the payments. It is always the last resort by lenders because of the process involved after the sale. It could take months to repossess the vehicle and all cost involved here may reduce the amount of money recouped. Another risk involved in title loans during this time when the borrower has possessed the car is that the property is bound to depreciation. In some states the borrower are allowed to delay for up to a period of 30 days before disposing the vehicle.
One main disadvantage with cash title loans is that the borrower could lose the asset pledged as collateral without much in return. This is the high risk it exposes borrowers to hence generally expensive as an alternative to get cash in times of dire need. Inasmuch as a cash title loan will get you out a short term need borrowers should avoid them as much as possible. One puts themselves at high risk to small amount of money.
A www.applecarloan.com/ Title Loan is therefore the best alternative a person should seek when in a fix and in real need of money to take care of their financial shortcomings. If it is a must do then the borrower should be aware of the risks involved. The lender is also at the same risk as well.