Car title loans have become a common method to obtain some quick money. Their adoption has continuously increased as there are various benefits derived from them. However, just like with any other loan they present some dangers.
The following are some benefits and disadvantages of cars and truck title loans we discussed with TNL Car Title Loans.
Advantages of Vehicle Title Loans
The most crucial advantage is the ability of the debtor obtaining the automobile title loan to get cash as soon as possible. Processing of car and truck title loans takes a maximum of two days. This is due to the fact that little complexity is involved, the lender only has to inspect the automobile to verify that it is at least worth the amount that you are borrowing.
Vehicle loans are a convenient and unique option for borrowers who urgently need the loan. It only requires the lender to agree with you on the amount and the terms, then you can obtain the cash. In most cases you receive the money on the same day that the loan agreement is approved and signed off.
Traditional loans are processed slowly, the credit report of the borrower is assessed to determine their creditworthiness and to determine if they can meet the loan obligations on time. The good thing is an auto title loan does not require checking the credit report and hence eliminates the challenge that would be experienced by a person with a poor credit rating. The only requirement to get a quick auto loan is that you own a personal vehicle and have a stable stream of revenues from which you can pay the loan from.
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Cons of Vehicle Title Loans
The interest on these loans is pretty high in comparison to other kinds of loans. In some cases the rates are higher than those offered by credit cards and can even exceed 100 percent annually. There are only a few states that have laws that curb such exorbitant and exploitative interest rates. Due to their nature car title loans are usually for short duration with expectations of rapid payments. Delay in making payments leads to late payment fees that increase the loan amount due.
There is a likelihood of losing your vehicle if you do not pay the loan which can be as a result of higher payments from the increased interest. In case of default, the lender has the option to take away your vehicle which is usually the collateral for this type of loan. Hence always be aware that your car can be repossessed if you default.
Before getting a title loan from your preferred lending institution it is important to be aware of the advantages and disadvantages of these loans. If you are comfortable with the risk and higher interest rates auto title loans can be a good experience in case you need some emergency cash.