Title loans are ones that require having a vehicle as collateral. They’re quite popular as they do not require checking an individual’s credit rating to be qualified. Over the years, application requirements have gotten quite easy to pass, and almost anyone with the right collateral could get a title loan.
The origin of car title loans dates back to the 1990s, and they were a way for consumers with a bad credit rating to be able to take out a loan. It is built upon simple mechanics, lending the applicant up to 25% of the car value after the lender assesses its value. The reason it doesn’t require a good credit score is that if the borrower defaults, the car’s title will be repossessed by the lender.
Thanks to the fast-paced growth of technology and innovation, borrowers don’t need to physically visit a store to get their car title loan. A lot of borrowers are resorting to the internet to find and compare the best lenders while avoiding traditional shops that charge a soaring interest rate. To facilitate things further, we’ll be providing you with a few tips that should put you in the right direction of getting a title loan online.
Understanding the Process
Whether you’re getting your car title loan through a physical store or online, you need to know that they are high-interest loans that are usually recommended for short durations. It’s one of the best solutions when you’re in a pinch and in need of some quick cash to help with an emergency or problem. Some car title loans can reach an average of 300% interest, which is a red flag if you’re looking for a long-term loan solution.
While the interest rates are generally high, it doesn’t mean that you can shop around and review other providers for better deals. The online aspect makes it quite easy to review different lenders; you can even visit this site for a condensed list of the most recommended lenders. This should help save time, effort, and hassle.
Similar to a store’s car title loan, you’ll need to have all the specified documentation available upon request. While lenders may vary, the paperwork required for a title loan seldom does. You’ll need to have paperwork which includes a proof of address and income, insurance, the title of the car, VIN, social security card, and driver’s license.
Make sure to check whether you’re living in a state that allows these loans or not; states which do not allow it are the following: Colorado, Oregon, Wyoming, South Dakota, Rhode Island, Hawaii, and Connecticut. Some states differ in the minimum value of the car allowed to obtain a title loan, so be sure to check online or with your lender.
The best thing about applying for a vehicle title loan online is how easy and smooth it can be if you already have all the required paperwork. Once your lender approves your application, you can receive your loan through many channels, from digital ones to direct deposit into your bank.
Most online title loans are issued on the same day, and some even provide MoneyGram code to collect the cash from any Walmart branch. The loan is considered low-risk to lenders and getting approved is quite easy as long as you have a vehicle of at least the minimum allowed market value.
Repaying the Loan
Every lender offers different terms and interest rates on title loans, so you’ll need to work with your issuing lender to figure out the best payment scheme to ensure that you don’t disrupt your financial flow. Since the car is collateral, you’ll be allowed to drive it as long as you don’t default on the loan. Be aware of penalties for late payment, in addition to not overestimating the amount of money you need due to the high-interest rates. If you’re able to repay the full loan before the agreed schedule, you can go ahead without worrying about any penalties.
Getting a car title loan is a decision that shouldn’t be taken lightly. It’s recommended to take your time deciding on how much you need and how long it’s going to take you to repay it before applying for one. Applying online has certainly made it much easier to take out a title loan in addition to same-day funding processes. This is why it’s very important to take your time reading the reviews, looking for the best offers from lenders, and reading the presented contract carefully. When you’re applying for a loan online, always make sure that you trust the website you’re dealing with and follow cybersecurity practices.