Car title loans in Houston are actually a lot like payday loans, as both options offer a simple application and approval process to get you money same-day. When you apply for a payday loan, the lender will require personal information, such as job history and monthly income, but your credit will not be checked. Payday loans are unsecured, which means you don't need to give up any belongings as collateral against your loan. While this may be an advantage, it also means payday loans are a higher risk with a higher interest rate for a lower sum of money, which is usually between $150 and $1,000.
Despite the similarities, Houston car title loans are a bit different. Title lenders will still want to same information and they will not check your credit, but your vehicle is used as collateral against your loan. When you take out car title loans, Houston lenders will use the value and equity in your car as a basis for the loan. Your loan could be up to $15,000, depending on how much your car is worth. You will also need to give the lender your car's title until you pay back the balance.
Don't Make Houston Car Title Loans Long-Term!
It's true that lenders will allow you 1-3 months to pay back car title loans in Houston, and you can take even longer to pay back the balance by continually rolling your loan into a new one. Keep in mind the longer you take to pay off your balance, the more often you will need to roll it over. The more you extend the loan, the more interest and fees you will need to pay. As your balance grows, it will become even more challenging to pay off the balance for good.
The vast majority of title lenders will happily work with you if you let them know you're having trouble making your payments. Still, they have the right to take action if you default on your loan, which is even more likely if you don't try to work with them first. The consequences of falling behind on title loans is serious, and if you fail to make payments on car title loans in Houston, lenders may:
• Repossess your car without notice
• Require you to pay off the balance in full before they give the car back
• Sell your car at auction to recover their losses
• Sue you for the remaining balance after your car is sold
If this happens to you, remember that lenders cannot break into your home, nor can they physically threaten you. If you can't make your monthly payments and you're afraid of falling behind, you need to contact your lender as soon as possible. They will work with you to create a new agreement on your payment terms. Remember: lenders don't want to repossess your car! It's very expensive for them, and they probably won't even recover the full balance you owe.
If you're planning to apply for car title loans in Houston in the near future, make sure you can afford the loan ahead of time to avoid problems later on. Car title loans are certainly a great option and give you money when you need it, but they are not intended to be a long-term debt.
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