Why Car Title Loans Have Become More Popular

popular1When the U.S. economy began to fall apart in the late 2000s, it left hundreds of thousands of people out of work and many who went on to financial ruin. The resulting fallout of the bursting of the housing bubble and the ensuing recession left
many people with nowhere to turn. The failing economy also took with it the credit histories of thousands of individuals. Numerous individuals were left with bills they could not pay. Some had to file bankruptcy to try and get a fresh start.

 

Banks and other lenders clamped down on their lending practices as well making it more difficult for individuals to borrow money. As a result, other forms of lending became more popular. One of those is the car title loan. As conventional loans got tougher to obtain, the more secure, less risky title loan started to give borrowers a new avenue for borrowing money.

 

A person who possesses a vehicle and its title free and clear of any liens can obtain a car title loan from a lender. Title loan companies, like Embassy Loans, prefer when a vehicle is completely paid off and when the vehicle is ten years old or less. There are instances when a title loan company will lend to a borrower who still has a loan on the vehicle.

 

Car title loans are easier to obtain than traditional loans. The process is very easy. Those who qualify fill out an application, normally online. The lender will ask for some documentation to verify a person is who they say they are. The borrower must have the title to the vehicle. The title loan company will assess the vehicle to determine how much can be borrowed. Most lenders will only loan 30 to 50 percent of the full value of the vehicle. This ensures that the lender can recover most of its losses if the borrower does default on the loan.

 

The entire processing of the loan is much faster than conventional loans. This is another reason why car title loans have gained in popularity. The typical loan from a bank will take several weeks to process. The bank will scrutinize the borrower’s credit history in an effort to make a determination as to whether or not the individual is likely to repay the loan. At Embassy Loans, for example, the typical car title loan is processed in an hour. Because of their quick processing and the fact that the loans are not based on credit, car title loans continue to grow in popularity.