When Auto Title Loans Are A Good Idea
With all the kinds of loans out there, a car title loan is unique and for some people
, a great solution for a short-term financial problem. These loans are secured with a free and clear car title, which means the car is actually collateral for the loan.The loan would be established for a certain amount of money and spread out for a specified amount of time. The lender would hold onto the borrower's title until the balance of the loan is paid.
A car title loan offers a number of advantages over other loan types. For one thing, this type of loan provides a means for quick cash.
In fact, of all short-term options, the title loan is considered one of the easiest. For this loan, the person would simply complete an application and once submitted, it would be reviewed and the answer regarding approval or denial provided within 30 minutes of less.
Another benefit of a car title loan is that the lender doesn't care what the money is being used for. It could be for something such as vacation, a shopping spree, or to take care of bills to include past due utility bills, car repair, and medical bills. Being able to walk into a loan company or apply online without being drilled offers applicants a high level of dignity.
Then, once a person fills out and submits the application for a car title loan, if that individual were to change his or her mind, the loan company would simply be notified and the process stopped. Sometimes, people will start the loan process but then identify other means for money at which time the loan is no longer needed.
Typically, the lender would advise the applicant of the time limit for backing out and as long as the process is stopped during that time, nothing is lost. Once a person pays a car loan off, he or she assumes the next time the title will be used is when a new vehicle is purchased or the car traded in. While this is one possibility, the individual might also use the title when quick cash is needed.
Auto title loans have been one of the first quick cash type loans around and they continue to be beneficial for people around the world. With a clear and free title, people can consider auto title loans if they ever find themselves in a situation where a few hundred dollars up to about $2,500 is needed fast.
These kinds of loans are very, very common and the money is used for hundreds of reasons, whatever the borrower chooses. However, most often money coming from these loans goes toward fixing some type of financial problem.
As an example, if a person had a close relative or friend living in another state who passed away, the priority would be to attend the funeral. However, if there were no extra money in the bank to fly out of town, this would be impossible.
Now, with auto title loans, a person could use the car's title as collateral and get enough money, often within hours, to purchase a plane ticket. Considering that auto title loans are designed as short-term financial solutions, once the person had flown to get to the funeral services, the loan could be paid off within a month using paychecks.
Of course, if the borrower wanted to pay the loan off early, he or she could. It would be important for this individual to choose a lender for auto title loans that does not tack on any penalty for early payment.
Another scenario in which money coming from auto title loans would be beneficial is for a person that was laid off for a short period and although back to work, he or she is now months behind on utility bills and in fear of having them shut off. To avoid losing electricity, gas, or water, not to mention paying the enormous reconnection fees, it would be easier and more cost effective to look at auto title loans.
In most cases, auto title loans have a reasonable interest rate and any administration or processing fees are insignificant. Even so, anyone thinking about getting this type of loan needs to ask questions of the lender and read all the fine print so there is no confusion on expectations.
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