Imagine a situation where the pipes in your kitchen have suddenly burst, leaving you in a financial predicament with empty bank accounts and no savings to fall back on. With no one available to lend you money, the sole remaining option is to consider obtaining a loan using your car title as collateral. This allows you to secure the funds needed to address the emergency that has arisen. However, you should understand how car title loans work.
How To Get A Loan Against Your Car Title Loan?
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To apply for a secured loan against your car title, you’ll need a clear title and equity in the vehicle. This is known as a car title loan because you are using your car as collateral to secure the loan. Car title loans can be easy to find, but you’ll need the following to get a loan against your car title.
- The Car Title
- Proof of Insurance
- Valid Photo Id
- Pictures of Your Vehicle
- Proof of Gross Monthly Income
Next, you’ll want to apply with a reputable car title loan company. If you need a car title loan, Max Cash Title Loans is recommended because they work with most lenders and can help find loan terms that suit you.
Should You Use a Loan Against Your Car Title Instead of Alternative Loans?
Personal loans from traditional institutions such as banks and credit unions can help you. However, the problem with getting such a loan is that they need a lot of time and good credit. First, you have an emergency, and you are stuck without funds. It would be best if you solved that emergency as fast as possible. For example, your car has stalled on the highway, and you need to repair it because you cannot go to work without it. In such a case applying for a loan from a credit union or bank will take time.
Second, those banks must check your credit rating before approving a loan. All these processes take time. One solution is to take out an auto title loan because it is fast, easy, and simple. The approval time for a car title loan is short, and you get cash fast. Peer-to-peer loans, credit card cash advances, and other short-term loans need much time. An emergency needs fast cash.
What alternative loans are available in the market?
All loans have an annual percentage rate, also called the APR. The APR tells you how much it costs to borrow for one year. The APR on car title loans can be very high, but they vary from one lender to another. It is possible to negotiate with your lender to get a lower rate. When you get a car title loan, the lender must tell you the APR and the loan cost in dollars. The following loans can give you money but have a high APR, which may be non-negotiable. You also risk a car title loan repossession if the payment is not made on time without informing the lender.
Credit Card Cash Advances
However, they still feature interest rates below triple-digit levels, although they are highly costly. Those borrowers with credit cards, loans, or other types of credit will likely have access to such monetary resources much less frequently. The interest rates are high, meaning the balances pile up fast. In addition, you cannot negotiate with the payment plan or installments. If you signed up for the card, then you must pay it.
Personal Loan
A personal loan can be your best option if you must borrow. Personal loans through a bank may also be secured or unsecured, but a local bank or credit union may offer more favorable terms than a large lender. You need to understand that you don’t need to pledge collateral, but you may get a lower rate. The bank will check your credit rating, and the application process is longer. The issue with the long waiting periods is that you may not have the funds to solve your problem on time.
Short-term bank loans
A bank or credit card is another option over getting a triple-digit car title loan. However, even the cheapest loans can be better than a car title loan. In addition, some banks may provide collateral to borrowers with poor credit. Banks could also secure employee cars by offering a loan on their vehicle. The decision to borrow money can be stressful if your situation is urgent or you are looking for fast cash.
Peer-to-Peer Loans
Because peer-to-peer loans are funded by private investors rather than by financial institutions, these situations can have much higher approval rates than bank loans. However, interest rates generally drop. Interestingly, the minimum loan amount may be more significant than the minimum amount for a car title loan, which means there is the potential for borrowing beyond what is required. However, you can make a payment with no penalties.
Should You Take Car Title Loans and Pay Credit Card Loans?
The short answer is probably not because the APR on a credit card will be lower than on a car title loan. One disadvantage of a credit card is that it attracts interest once you take the money and spend it. Every month, the company charges interest if you have a balance on your credit card. As a credit card user, here is where you will get stuck; making the payments on time. The following month, you will need to pay more money and interest. It is a cycle that never ends. The best thing is to borrow a loan against the car title and repay the credit card loan. Then it is possible to look for an extra job or sell a household item and repay the car title loan.
Can a car title loan help me close off my credit card debt?
One of the problems that a borrower will experience with credit card debt is that the interest rates are at an all-time high. They will experience a sharp rise in balance if the debt is not entirely cleared. Credit card or credit card cash advance Using a credit card could be an option if you need short-term funds — but if you can’t pay off the expense in full by the time your payment is due, you’ll have to pay a higher interest rate. The average credit card rate for new card offers ranges from 16% APR to 23.23% APR for standard purchases. In addition, the credit card accumulates interest whether you are paying it. Then, the worst-case scenario is that they dent your credit report.
Credit card debt gives you a poor credit report that you may not sustain. The best thing is to take an auto title loan, pay the credit card debt and close the cards. You must ensure that you do not close the card with a balance. A balance of even a dollar will grow into something big, and soon, you will get calls from banks.
Making a bulk payment will help you to clear the balance. Transferring the debt to other credit cards with better rates is also advisable. However, the best-proven way to solve the issue is using auto title loans to pay off the credit card advance. This way, you do not risk hurting your finances. At the same time, you get to salvage your credit score. Remembering that an auto title loan does not affect your credit score is good. Therefore, you are safe when you borrow loans against your title.
What happens when you cannot pay your car title loans?
You might not pay the lender when the car title loan repayments are due. The lender might let you borrow the money for another 30 days. This is called a “rollover” or “rolling over” the loan. To roll over the loan, you will pay another monthly fee. If you roll over the loan several times, you might pay a lot to borrow the money. Eventually, you might not be able to repay the lender. The best thing is to ensure that you have a financial plan for paying the loan.
Conclusion
When you get an emergency, assessing it and looking for the fastest way to solve it is essential. Unfortunately, troubles such as burst kitchen pipes or spoilt water heaters cannot wait. Now, loans against car titles from Max Cash will help you solve such problems. Moreover, taking car title loans for emergencies is possible with the right requirements for a title loan. There is no need to look for personal loans from a bank or credit union because they take a long time to process. In addition, Max Cash works with some car title loan companies that do not require a credit check for your loan.