What Is A Car Title Loan?
An auto title loan is a type of secured loan where a borrower uses a vehicle as collateral. In most cases, the vehicle must be 10 years old or less and be paid off. The title to the vehicle must be free of any liens. If these conditions are met, a car title loan can be obtained.
The Process
To obtain a car title loan, a potential borrower who meets the above requirements must find a title loan company such as Embassy Loans of Florida and fill out an application. Most companies, including Embassy Loans, offer the option of filling out an application online. Once the application is complete, the applicant will need to provide some documentation such as a driver’s license and the title to the vehicle. Embassy Loans will also ask for proof of residency. When the applicant’s identity and residency have been verified, the assessment of the vehicle can begin.
The title details, the vehicle identification numbers (VIN), and the vehicle itself must all match, and then a value for the car or truck will be established. Most often, title loan companies will use a blue book value. The loan amount is usually established at about 50 percent of that value. If the borrower defaults on the loan, then it is possible for the lender to recoup most or all of its losses by selling the vehicle.
Once the value is set, the loan amount and the final documents can be drawn up. The borrower must sign the loan agreement and can then receive the funds. Many title loan companies today are able to electronically deposit the money directly into a borrower’s bank account. The funds can then be used to repair the vehicle.
Advantages Of A Car Title Loan
A car title loan is not based upon credit. Title loan companies do not spend a lot of time looking at the credit history of a borrower. This is great for those who may not have the greatest credit history. Not searching through a person’s credit history also saves a lot of time and paperwork. Traditional loans often take several weeks to approve because of the paperwork involved. A car title loan from Embassy Loans, for example, is normally complete with a borrower gaining access to the funds within an hour. There are many times when a title loan is finished in just a few hours after the application has been filled out. If you meet the requirements, a car title loan is a quick and easy way to take care of any car repairs.