Car title loans have risen in popularity over the past several years. They provide a relatively easy and inexpensive way to borrow money and do so quickly. Still, auto title loans are not as well-known as other more traditional types of lending. As a result, many have questions about car title loans. Here are the questions that people frequently ask.
- What exactly is a car title loan?
A car title loan is a short-term loan where a borrower uses a vehicle as collateral. A typical car title loan is for a few hundred to a few thousand dollars and is available to vehicle owners who have a free and clear title.
- How do I qualify?
Borrowers must own a vehicle and possess the title. The best-case scenario is when the car isn’t financed, and there are no other liens on the title. Car owners can still borrow if they have an existing auto loan, but they must have enough equity to do so.
- How much can I borrow?
The amount one can borrow using a car title loan is dependent entirely upon the value of the vehicle and if there is an existing car loan. Typically, lenders will allow borrowers to receive up to 50 percent of the car’s value. If a car is worth $10,000 and is free of finance, a person could borrow up to $5,000.
- How long does it take to get a car title loan?
Embassy Loans is one of Florida’s leading title loan companies and has helped tens of thousands of customers. Many of those customers were able to gain access to cash within an hour. Car title loans are unlike traditional loans from a bank or credit union. They don’t require as much paperwork and take less time to process.
- Can I drive my car why I have a car title loan?
As the owner of the vehicle, an individual still maintains possession of their vehicle while repaying the loan. If a borrower fails to make payments, though, a lender does have the right to take possession of the vehicle.
- What if I have a car loan?
If you have an existing car loan, you still may be able to obtain a title loan. Whether you can or not will depend upon the balance of your existing car loan and the value of the car. If there is enough equity, you may be able to qualify.
- Do I need to have good credit?
One of the big reasons why car title loans are so easy to process is because they do not require examination of a borrower’s credit history. A stellar credit history and an excellent credit score are not necessary to qualify for a car title loan.