Once upon a time there was just a bank loan – and this made everyone’s life simple. We all knew to turn up in our suit, mind our P’s and Q’s with the bank manager, and we’d get a black and white loan. Unfortunately, life’s not that simple anymore. It’s not just the high-street banks which provide such lending power, there are now countless other firms which are able to provide quick bouts of finance. While some of these loans have come in for criticism over the years, the beauty about them is that they quash any red tape that the banks once provided. In short, they’re much more accessible.
One of these types is the car title loan. It’s not gained quite as much exposure as some of the other products available, but it’s still caught plenty of attention. In a bid to clarify just what it is, and to learn how title loans can give you the cash you need, here’s the lowdown on some of the most common questions associated with the industry.
What is a car title loan?
In short, a car title loan is a form of collateral finance that places a loan against your vehicle. While a mortgage will take your home as security, a car title loan is a somewhat “toned down” version and involves your car being given as a guarantee to the lending facility.
What can borrowers use the money for?
Like most loans, the lender doesn’t really have any interest in what the money is paid for. Contrary to popular belief, there is no need to “invest” the money in fixing or improving your car, most people will use the cash for something completely unrelated.
What requirements are attached to these loans?
As we said in the early portions of this contribution, one of the worst things about the typical high-street loan is the fact that bank managers are becoming more stringent than ever. Even for the most pitiful amount, you’ll be put through a thorough background check and be shoved right to the bottom of the pile as they mull over countless other applicants.
This is one of the reasons why loans, such as the car title one, are soaring in popularity. In these instances, the requirements are few and far between and usually involve the presentation of your driver’s license, the title certificate, proof of insurance, proof of residence, income verification and references. For this reason, it’s no surprise to see a lot of these loans being processed within a day, with lenders simply having to verify that the above documents are legit.
How much do people tend to borrow?
The term “how long is a piece of string” couldn’t be more applicable in this instance. In short, it really depends on how much your car is worth. A lot of the car title loan providers have a minimum figure in mind, but in terms of the maximum, there have been cases of some people borrowing up to $50,000. As such, it can be a superb method to raise significant capital.