There are many different types of loans available to people who are in need of money, no matter the reason they need it. People borrow to buy houses, cars, furniture, and much more. Most people are familiar with conventional borrowing. You go to a bank or a credit union, fill out a bunch of paperwork, and cross your fingers that you will be approved. Conventional loans can take several weeks to approve.
Car title loans are different in some ways from other, more traditional loans. When you go to the bank for a loan, the loan is not secured by any collateral. It is secured by your signature and promise to repay the loan. An auto title loan is a type of secured loan where a person’s vehicle serves as collateral.
To obtain a car title loan, a potential borrower can visit a title loan company such as Florida’s Embassy Loans, which has helped thousands of people with car title loans over the past several years. An application must be filled out to start the process. Most applications take just a few minutes to complete.
Once the application is complete, Embassy Loans, like other title loan companies, must check some of the applicant’s documentation. First, a person’s identity must be verified as well as a person’s residency. The title to the vehicle must be examined and the VIN (vehicle identification number) on the title must match that on the car.
When those items are verified, the vehicle is then assessed for its value. This is important as it will establish the maximum that a person can borrow. The final loan terms are then drawn up and the loan documents are signed. The borrower is then eligible to receive the funds via a check or, as many title loan companies do today, by direct deposit.
Unlike an unsecured loan from a bank, a title loan is issued without the need for examining a borrower’s credit history. The loan is secured by the vehicle. If a borrower does not repay the loan, the title loan company can take possession of the vehicle and sell it to recoup its losses. A car title loan gives a person with poor credit an opportunity to borrow money in a time of need.
A title loan is also processed much quicker than a traditional loan. Most title loans are completed within an hour. Many borrowers receive their money the same day that they filled out their application. Title loans are a great source of emergency cash when someone needs it fast.