Ever since the credit crunch that came about as the result of the financial crisis that began in 2008, borrowing money has been difficult in the U.S. Banks and financial institutions are not as lax as they once were in handing out loans. Restrictions are tighter making it difficult for the typical household to borrow. This is one of the big reasons for the rise in the popularity of the car title loan.
A car title loan is a short-term loan based upon the value of, you guessed it, a vehicle. The vehicle is used as collateral for the loan. The lender evaluates the value of the car or truck and issues a loan in return for the vehicle’s title. Should the borrower fail to repay the loan, the lender can take possession of the vehicle.
Car title loans are somewhat different than a traditional loan offered by a bank or credit union. A conventional loan requires that borrowers meet a certain list of qualifications and undergo a thorough credit history check. Lenders will examine the financial history of a borrower to determine whether or not the person is a good candidate to repay the loan. Evaluating a person’s credit history takes time, and the typical bank loan may take several weeks in order to process.
Title loan companies, like Embassy Loans of Florida, do not have to take the time to scrutinize a borrower’s past financial history. Since the loan is secured by a vehicle, there is little need for a credit check. A title loan is the perfect alternative for those who may have had their credit history damaged by the recent financial crisis or for those with little credit history. Since companies like Embassy Loans do not need to spend the time with credit checks, car title loans are processed much faster than traditional loans.
The typical car title loan is normally processed in its entirety within an hour. Many are completed the same day that the application is started. Applicants fill out an application either in person or online to begin the process. An applicant must prove his or her identity and residency to the title loan company. The applicant must have a clear title to a car that he or she owns. Once the lender assesses the car’s value, the loan can be finalized. Oftentimes, this entire process can be completed in just a few hours. The speed and ease of process is another reason why car title loans are becoming more popular.