Auto title loans might not be as well-known as conventional loans from a bank or a credit union, but they do serve to help people who need access to emergency cash. A car title is similar to other types of loans, but the process of obtaining one is a little different. Just like with mortgage loans and personal loans, there are numerous alternatives when looking for a title loan lender.
When choosing a title loan lender, it is important to understand how the title loan works. Title loans are a type of secured loan where a vehicle’s title is used as collateral. Since the loan is secured, the loan processing is somewhat different than that of a conventional loan from a bank. There is no need for a credit check, so borrowers that don’t have good credit can still take out a title loan.
The process for obtaining a title loan is easy. Potential borrowers must fill out an application first. At Embassy Loans, one of Florida’s leading title loan companies, applications take a few minutes to fill out. The applicant’s identity and residency status are verified. Then, the title loan company will assess the vehicle for value. Once that is done, the final loan documents including the payment plan are drawn up. This process usually takes just an hour.
Understanding this process can help a person find a reputable lender. A quality title loan company, like Embassy Loans, will offer reasonable loan terms. Embassy Loans works with individuals to develop customized loan repayment plans.
If a lender advertises an interest rate in monthly terms, make sure that you calculate the annual rate by multiplying it by 12. This is a common trick by title loan companies to make it appear that an interest rate is much lower than it actually is.
You should also ask a title loan company if you can pay down the principal balance of the loan each month. Most lenders will allow you to do so. This way, you can pay off a loan much quicker and end up paying less in interest.
A car title loan is a great way for someone to access quick cash. For those with less than stellar credit histories, these loans can be the only method of obtaining money for an emergency. As with any major purchase, take your time and do your homework when searching for a reputable title loan lender.