Taking out a car title loan can often save the borrower from a dire financial situation. Someone who needs access to quick cash after a job layoff or for unexpected medical expenses can use the money to get through that so-called bump in the road. The downside, of course, to doing a car title loan is that there is the risk that the lender could repossess the vehicle. Most borrowers can avoid having their vehicle repossessed.
Basics Of A Car Title Loan
Auto title loans are available to any person that owns a vehicle that is paid off and has a clear title. Most title loan companies, such as Embassy Loans of Florida, would prefer the vehicle to be less than 10 years old. Persons interested in a title loan fill out an application to start the process. Embassy Loans, like many other companies, allow people to fill out the application online. Prospective borrowers will have to prove their identity as well as their residency. They must also have the original title and that title must match the vehicle.
The loan is secured by the car, so there is no need for credit checks or other mounds of paperwork typically associated with loans. The lender will establish how much the vehicle is worth and then set a loan amount. The terms of the loan are drawn up, the documents are signed, and the borrower receives his or her money. The entire process usually takes an hour and many loans are completed the same day the application is filled out.
The Reality of Car Title Loans
While the possibility of repossession exists, in reality only about four to eight percent of those taking out a car title loan face losing their vehicles. Well over 90 percent of all car title loans are repaid or refinanced and borrowers do not lose their cars. Anyone thinking of taking out a car title loan can help themselves avoid repossession by doing the following.
- Always work with a trustworthy lender.
- Borrow only what you need.
- Make your payments on time.
- Try to pay ahead of schedule and try to pay down the principal.
- Use renewal as a last resort.
Work with lenders such as Embassy Loans, which has helped thousands of satisfied customers. If a vehicle allows you to borrow $10,000 but you only need $5,000, do the right thing and borrow the $5,000. You should have a plan to pay the car title off as quickly as possible. Make all your payments on time and pay down the principal as quickly as possible. If something comes up where you have to miss a payment, consider renewing the loan to get back on track.