Borrowing money from a title loan company or financial institution in lieu of a car that you own is what a car title loan is all about. In case of emergency, people in need of big amount of money can opt for this loan. Banks offer such flexible services so that the client can borrow money, yet continue using his car, as long as he repays the loan amount on a regular basis.
Using the car as guarantee, the banks sanction a loan amount that is nearly equal to the market price of the vehicle. However, the borrower needs to submit the duplicate set of car keys and the title certificate to the bank. When the car title loan is granted by the bank, the borrower has to sign the loan agreement. If the borrower fails to repay within the stipulated time, the bank confiscates the car and resells the same to cover the loan amount. On the other hand, if the car loan is paid off, the bank returns the certificate along with the keys.
A car title loan is a short term loan. The process of getting a car title loan is simple, in which the repayment period varies from 2 weeks to 1 month. The short repayment period calls for high interest rate. If the borrower is unable to repay the loan within the allotted time, the bank extends the repayment period for another month; but extending the repayment period means paying higher interest. The interest rate mentioned in the loan agreement can be doubled.
Such is the nature of the loan that anyone who does not have a sound credit history can also take advantage of this car title loan. Income statements, identity proof and age proof are required to apply for this loan. So, anyone who has fully made the payment of his/her car can apply for this loan. Before applying, visit the web to get an idea about the car title loan. There are online guides available that can help in better understanding of the terms and conditions of the car title loan.
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