If you have tried to get a conventional loan recently, you are aware that standards have changed since the financial crisis that affected the nation in the late 2000s. As a result, alternative loans such as car title loans have become more popular. An auto title loan is one that is secured by a vehicle. As a result, the processing of the loan is much different.
At Embassy Loans of Florida, someone who owns a vehicle that is paid for and is less than 10 years old can qualify for a car title loan. In some instances, it is possible to secure a title loan when there are still payments remaining on a vehicle. Usually, lenders will require that there be 12 or fewer remaining payments. Also, it may be possible for older vehicles to be used depending upon their condition and value.
To secure a car title loan, a person must fill out an application to start the process. At Embassy Loans, applications can be filled out at one of the company’s many convenient locations or they can be filled out online. Once the application is complete, applicants must submit documents that will verify their identity and residency. The title must also be submitted and the vehicle identification number (VIN) must match that of the vehicle.
The title loan company will then assess the vehicle to see how much it is worth. Most lenders will use a blue book value and then lend approximately 50 percent of that value. Lenders will not loan the full amount of the car or truck in case the borrower defaults. This way, the lender can sell the vehicle and recover most, if not all, of the losses.
There are no credit or background checks as there are with conventional loans. An auto title loan is not based upon credit, so there is no reason to check. Some lenders may do a credit check, but the loan is not approved or denied because of credit. Without a credit or background check, a car title loan can be processed in as little as a few hours. In most cases, these loans are completed in an hour.
This is the real value of a car title loan. It is a fast and easy way to access money in a short amount of time. The loans are short-term and do have higher interest rates than most loans, but being able to access cash for an emergency and not have to worry about a credit score make car title loans very valuable.