A car title loan is a quick and easy way to borrow money if you own a vehicle with a free and clear title. There are a number of other ways that people can borrow. Payday loans, for example, are another quick option. Traditional bank loans are an option, but take longer to process. Regardless of the type of loan, all have an associated cost. That is the interest rate; the amount you will be charged for borrowing money. Car title loan interest rates are typically less than those of many other types of loans.
Interest Rates And Risk
For any lender, loaning money is risky. Interest rates reflect the amount of risk a lender is willing to take when offering a loan. The higher the interest rate; the riskier the loan. Payday loans, for example, typically have higher interest rates because they are a very risky loan. A person buying a home who has a great credit history and lots of monetary assets is a less risky candidate than a person with a low credit score and no bank account.
Car title loans, like those offered by Florida’s Embassy Loans, are a type of secured loan. A vehicle is offered as collateral in exchange for money. If the borrower is unable to repay the loan plus interest, the lender can take possession of the vehicle. Lenders normally try and sell the vehicle to recover their losses. Because a lender can do this, it is able to offer lower interest rates to its borrowers.
Obtaining A Car Title Loan
The interest rate you receive on a car title loan is based upon your application and vehicle. You can apply for a car title loan at Embassy Loans in person or online. You must verify your identity, residency, and ownership of the vehicle. Your car or truck will be appraised for its value and Embassy Loans will draw up the loan agreement. The entire process normally takes between 24 and 48 hours. Car title loans are quick mainly due to the lender not needing to go through a person’s credit history. Unsecured loans are riskier, and lenders will take their time determining if someone is a good candidate to repay their loan before approving it.
Because of their quick processing time, car title loans are great for those in need of cash in a hurry. They are also advantageous for those with poor credit histories. Still, the interest rate that one receives on a car title loan is based upon the borrower’s profile and the value of the vehicle.