The bankruptcy will lower a person’s credit score by 200 points or more. A person who had what was once considered an excellent credit history all of a sudden becomes a credit risk. The bankruptcy will remain on a person’s credit report for up to 10 years. Potential creditors shy away from lending to those who have a bankruptcy showing in their credit history.
Individuals with a bankruptcy in their past will have a hard time attempting to take out a conventional loan. With more strict lending standards as a result of the credit crunch that started in 2008, borrowers must have an excellent credit history in order to borrow. So where does that leave someone with a recent bankruptcy?
Well, there is a great alternative for those who meet the criteria. Individuals who own a car outright and possess a clean title to the vehicle can use it as collateral for a car title loan. While not as popular or well known as conventional loans, an auto title loan offers alternatives to those with less than stellar credit histories.
An individual can start the title loan process by filling out an application. Embassy Loans of Florida, for example, is a consumer finance company that has helped tens of thousands of individuals with car title loans. Individuals fill out an application either online or in person at one of the company’s many convenient locations.
Once the application is done, the processing begins. An applicant’s identity must be verified as well as his or her residency. The title to the vehicle will be checked to make sure the VIN (vehicle identification number) matches. When that is complete, the vehicle is then appraised to see how much it is worth.
The appraisal of the vehicle is important since it will determine how much an individual can borrow. The loan documents can be finalized and signed, and the borrower can then pick up his or her money. Many title loan companies even offer direct deposit.
Since a car title loan is secured by a vehicle, there is no need for the lengthy credit and background checks associated with traditional loans. This makes it much easier for someone with a subpar credit history to obtain a loan.