A car title loan falls in the category of secured loans. These loans are extremely popular and get processed and sanctioned within a couple of hours. As compared to other kinds of loans, a car title loan carries less risk. The banks and other financial institutions have several formalities and complications; so the true worth of the money during emergency is lost. People often have to rush to different offices to collect the required documents, before the loan actually gets sanctioned. On the other hand, a car title loan is an effective short term loan.
The borrower should possess a car on his name and the rest is taken care of by the lenders. A car, with no pending payments can solve your financial needs in a jiffy. The loan amount sanctioned is generally fifty percent of the on-day market value of the car. The basic documents that the car owner has to deposit to the lender includes, car title, identity proof, insurance papers, address proof and age proof. Apart from the documents, the borrower has to submit a set of car keys. A car title loan is much better than opting for a credit card or availing secured loan against your home.
In case of car title loan, the borrower is availing the fund against the car. The car is being used as security; however, the borrower gets to use the car, even during the loan repayment period. The only requirement is to repay on time. Since the interest rate is slightly on the higher side, the borrower should make the monthly payments and try not to extend the repayment time to the roll-over period. During the roll over period, the already high interest rate goes up further; so it is always advisable to avail this loan as a short term loan.
A person with good, bad or no credit rating can avail the short term loan. As a matter of fact, some people avail car title loan, to improve their credit ratings. So, irrespective of you credit score, you can enjoy the benefits of the loan.
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