Applying for car title loan - is it worth?

Nowadays, the banks and financial institutions are offering car title loans so that the applicant need not wait for days or get into the formalities to get the loan sanctioned. When you are unable to arrange money at the time of crisis, you car can be of great help. The banks use the car as collateral to sanction car title loans to the applicants. In case of emergency, this is the best plan one can opt for. The loan usually gets sanction within a day.

A car title loan is ideal for the ones having bad credit history. The objective of the car title loan is not to sanction huge amounts for a long period of time. Instead, the title loan is approved for a short term period at very high-interest. Therefore, it is always advisable to consider the car title loan as the last resort. If money is the need of the hour and there is no option left, paying high interest for the car title loan is the best approach. The banks and financial institutions understand the need and co-operates with the customers to ensure a quick and hassle-free process. He applicant needs to submit the car title along with car keys to the bank.

However, this loan is only for the ones who have made the total payment of the car and is not paying instalments for it. The loan amount sanctioned is on the basis of the resale value of the vehicle. For getting the car loan approved, the applicant for the car title loan should be the owner of the car as well. The better the condition of the car, the more would be the loan amount.

The loan on car title is usually sanctioned for a month. The interest rate is so high that applicants prefer to repay the loan amount within stipulated time. The car title loan is ideal for people facing sudden financial crisis. If the loan amount is paid on time, the banks return the car title and the keys to the borrower. However, if things do not fall into place and the applicant is unable to repay within 30 days, the banks extend the loan period for another month. The interest rate goes up further in the rollover period. So, the applicants are advised to repay the loan amount on time. In worst case scenario, the bank confiscates the car and sells it off to cover the loan amount.

So, a car title loan is a great plan if used wisely and only in case of emergency.