Apply for a car title loan easily
Car title loans provide many individuals with a straightforward way of securing a short-term loan, though they generally attract high interest rates. To acquire a title loan, you will be obliged to pledge your car as collateral by granting the lender the legal right to possess the vehicle until the loan is paid back.
With the improvement of technology, the lender has a simple online loan application. The online form has sections where you fill out your name, phone number, year and make of the vehicle and your email address. Applying online is not extensive and usually takes a few minutes. A sale representative from the lender will call you to collect additional information.
The loan requester will seek out the services of a car loan lender, either by visiting their premises or online. When pledging your car, the lender will require specific document so that your loan can be approved. These include:
- A legal government issued Identification document such as a driving license
- Evidence of income
- Proof of residency
- The vehicle registration document
- Some state also requires one have car auto insurance
- Personal references (name, phone number, and relationships)
- Photos of the car
The maximum loan amount is determined by the value of the collateral. Many lenders will agree to lend you up to half the resale price of the car. The requester should also provide a clear title of the vehicle. This implies that the car should not have liens or existing financing.
Interest rate varies based on the state where the lender is found, but generally range from 36% to 100%. Although payment plans changes, the requester has to repay the interest accrued at the due date. The total outstanding sum is paid when the loan reaches maturity in a lump sum. If you are unable to repay the loan by then, state laws allow you to roll over the balance, and fill out a new title loan. The government has established the total number of times an individual can roll over the loan so that they are not continually in debt.
If the loan requester is unable to repay the loan or does not honor the payment schedule, the credit service organization may seek direction from the court to sell or repossess the car to offset what is unsettled.
In most cases, this choice is the last alternative since it will take a more extended period to recover and repossess the car. The process is also a bit costly since auction and courts cost. All reduces the total value they manage to regain.
In other instances, the lender is not receiving the interest yet the value of the car is depreciating. Most states have also adopted rules that allow the title loan lender to retain the car for 30 days to enable the loan requester to regain it through clearing the outstanding balance. Usually, any proceeds from the sale of the vehicle over the principal loan balance are paid back to the loan defaulter.
Cost of acquiring a title loan
You may have noticed that your loan lender is charging you 25% interest for one month, which may sound okay. Nevertheless, if the loan is rolled over for one year, the annual compounded interest rate equates to 300%. The cost associated with acquiring a title loan is higher because loan lenders charge higher interest rate than receiving the same loan amount through a credit card.
The loan application fees charged when applying for the loan also increase the price of borrowing. Although the costs are not referred to as interest, they will still be added up to your loan balance, and you will also pay them.
Getting back the title car
Once the whole amount is fully settled, you are required to sign your car title to show that the lender has freed the lien which had initially been placed on the vehicle. Once that is done, the lender then mails back the title to the holder unless the owner wishes to collect in it person. Once you repossess the title, you can visit the department of the motor vehicle near you and have the name of the lender removed. If you are comfortable with the name being on your driver license, you can also leave it on your car title or pink slip as it is. Doing so doesn’t affect the authenticity of your car title.
Although getting a car title loan approved is faster and more accessible, it is essential you strategize how you will repay it because you may end up losing your vehicle if you default.