Pawn shops actually work in a way similar to car title loans. Individuals take a valuable item to the shop where the item is appraised for its value. The pawn shop will lend the individual money based on the value of the item while the shop takes possession. The individual must repay what was borrowed, plus interest, within a certain amount of time. If the loan is not repaid, the pawn shop will take ownership of the item.
A car title loan is more similar to working with a pawn shop than it is to obtaining a conventional loan from a bank or credit union. Obtaining a car title loan from Florida’s Embassy Loans, for example, is relatively easy. For those looking for a source of quick cash, a car with a clear title is necessary. Potential borrowers can fill out an application online or at one of Embassy Loans’ many locations. Filling out the application takes just a few minutes and starts the loan process.
Once the application is complete, applicants must provide a few forms of documentation. They must prove their identity and residency. Most applicants will use their driver’s license and a utility bill. They must also produce the title to the vehicle that will be used as collateral for the loan.
The car must then be inspected. The inspection consists of making sure that the title matches the vehicle as well as determining a value. Once the value of the vehicle has been figured out, the loan can be finalized. Much like going to a pawn shop, there is no need for a background or credit check. The loan is secured by the vehicle. Should the borrower default, the lender retains possession.
Once the terms of the loan are finalized, all that is left is for the borrower to pick up his or her money. The entire process from application to receiving a check can take as little as an hour. Most car title loans are completed the same day that they are started.