Unlike more conventional loans from a bank or a credit union, a car title loan is based more on qualifications than explanations. Banks will ask potential borrowers why they need a loan and how the money will be used. Auto title lenders are not concerned so much with why the money is needed, but more with how the loan will be paid off. As a result, the processing of an auto title loan is a little different than that of a conventional bank loan.
Title loan companies, such as Embassy Loans of Florida, are more concerned with the vehicle being used as collateral. They want to know what condition the vehicle is in and information about the title. A person wishing to borrow money through a title loan must own a vehicle with a clear title. That means that there must be no liens placed against the vehicle. Should the borrower not repay the loan, the lender can take possession of the vehicle to protect its interests. The lender must make sure that if it does need to take possession that it can recover what it has lost as a result of the loan defaulting.
Potential borrowers must be able to prove their identity and where they live. Embassy Loans will spend time verifying the identity and residency of all of its applicants. A photo ID, normally a driver’s license, will suffice to prove a person’s identity. A utility bill is used to show residency. Addresses may change, and utility bills, which must be paid each month, are a great way for title loan companies to find out where an applicant resides. Again, should a borrower default, the lender needs to be able to find the borrower to protect its interests.
A credit background check is not required in order to complete a car title loan. Since the loan is being secured by a piece of property, the vehicle, an evaluation of a borrower’s credit history is not needed. Credit checks and background checks are part of the reason why conventional loans take so long. Banks and other financial institutions take a great deal of time examining whether or not a person is a good candidate to repay a loan. That is unnecessary when processing an auto title loan. As a result, car title loans are normally processed within an hour. Oftentimes, borrowers can have their hands on their money the same day that they fill out the initial application.