The cost of a college education has been rising for years. In most cases, the average college student and his or her family cannot afford this cost on their own. The National Center for Education reports that the average cost of tuition and room and board for one year is nearly $18,000. Even with grants, scholarships, and student loans, many families still find it hard to put a student through school. What other options exist? Well, a car title loan is one.
What Is A Car Title Loan
A car title loan is a type of secured loan where a person’s vehicle is used as collateral. The lender places a lien on the title while the loan is being repaid. If the borrower fails to repay, the lender then has the right to take possession of the vehicle and sell it to recover any losses.
How The Car Title Loan Process Works
Most title loan companies, like Embassy Loans of Florida, offer applicants the opportunity to apply for a car title loan online. Those who wish to apply fill out an online application that normally takes just a few minutes. Once the application is finished, an applicant is contacted by the lender. Potential borrowers must provide proper identification, prove their residency, and possess the title to the vehicle.
After all of the appropriate documentation is checked, the vehicle must be assessed for its value. Title loan companies will use some sort of blue book to determine how much a car or truck is worth. Once the value is established, the terms of the loan can be drawn up. It is important to understand that title loan companies will normally only lend about 30 to 50 percent of a vehicle’s value. If a truck is worth $15,000, a borrower will only be able to borrow $5,000 to $7,500. This helps to protect lenders should a borrower default on their loan. When the lender goes to sell the vehicle, most of the losses can be recovered.
How Long Does It Take?
Once the loan agreement has been made and signed, the borrower is ready to receive his or her money. At Embassy Loans, this entire process can take as a little as a few hours. Most loans are completed within 48 hours. The process takes less time than conventional loans because there is little need for things like credit checks. Without all of the paperwork that is associated with traditional bank loans, a car title loan is a fast and easy way to secure cash.