A car title loan in case of emergency

Banks and other financial institutions have come up with an innovative plan that can be of great help in case of financial crisis – car title loan. A car title loan is a special kind of loan in which the car is used as the collateral. If the car purchase amount has been paid off, you are eligible to apply for the loan.

The car title loan is a short term loan which can be of great help to the borrower. The car title loans offer convenient ways of getting funds in case of emergency. The customer can borrow money against the car. The borrower needs to submit the cart title and a duplicate set of keys.  Most of the banks and financial institutions allow the borrower to keep the car, but there are some institutions that keep possession of the car, until the car title loan amount has been paid off. The loan amount sanctioned will be on the basis of the resale value of the car. In some cases, the borrower qualifies for fifty percent of the resale value of the vehicle.

However, the interest rate is very high, so the loan amount should be repaid on time. If the borrower is unable to repay on time, then the borrower has the option of extending the payment period by a month. This is called the roll over period. It is better to repay the amount within the allotted time, because in the rollover period the interest rate further goes up to almost twice or thrice the actual loan agreement. Generally, the payment period is around thirty days which can be extended by another month with penalties.

A car title loan is a short term loan that does not require background check or references. The borrower who has bad credit history can also apply for this loan because the loan amount depends on the market value of the car.  In some cases, banks sanction the loan amount to customers who clearly state bankruptcy as the main and sole reason for applying for car title loan.

Before signing the car loan agreement, the borrower needs to go through the terms and conditions, and other guidelines of the car title loan. This would help the borrowers in taking a sound decision, before applying for the loan.

This is the most suitable solution in case of financial crunch.