What Is A Car Title Loan?
A car title loan is a secured loan that uses a vehicle as collateral. Most title loan companies, like Embassy Loans of Florida, prefer that the title be free of any liens. That means the car must be paid in full. In some cases, borrowers may have a small balance remaining. It is also preferred that the vehicle is no older than 10 to 15 years. Again, there are some exceptions.
How To Secure A Car Title Loan
Like other more traditional loans, obtaining a car title loan begins by filling out an application. Embassy Loans even offers its customers the ability to fill out an application online. After it is filled out, an applicant must submit several pieces of documentation. The applicant must verify his or her identity and residency, and must present the original title to the vehicle.
When everything is verified, the title loan company will assess the vehicle for its value. Most will use the most recent blue book values. With a value established, the final loan documents can be drawn up. Title loan companies will only allow borrowers to take out roughly 30 to 50 percent of the full value of the vehicle. If a car is determined to be worth $8,000, the maximum loan amount would be $4,000. If a borrower defaults on the loan, it is a little easier for the lender to recover most, if not all, of its losses.
What About My Credit History?
The great thing about a car title loan is that it is not based upon an individual’s credit. The loan is secured by your vehicle as collateral. Some lenders may run a credit history, but it is not the key factor in approving the loan. Even those with poor credit can take out a car title loan.
How Long Does It Take?
Embassy Loans will process most car title loans in an hour. Since there is no need for much of the paperwork involved with traditional loans, an auto title loan is processed much faster. Many borrowers receive their money within a day or two of beginning the process. The money can then be used to help cover the costs of your wedding.