There is no reason to be embarrassed about your money problems. The truth is, everyone experiences financial troubles from time to time. Being short on cash isn’t always an accurate indicator of how well you manage money.
I know, the idea of pledging your car as collateral is scary. And you shouldn’t apply for a loan if you doubt your ability to pay back the balance in full. However, before you shrug off this option, find out everything you need to know about auto title loans. These loans might be more useful than you think.
Here are three smart reasons to consider a title loan.
1. No credit check
Go to any bank and apply for a loan and the lender will conduct a thorough credit check. This is how banks operate, and you can’t get around a credit check. Having a lender pull your credit history isn’t a huge deal if you alway pay your bills on time and you maintain a high score. But if you’ve had credit problems in the past, a credit check can be the kiss of death.
The scenario is quite different when you apply for a title loan. This is a collateral loan and there is no credit check. In fact, you can get a loan with no credit history.
2. Flexible repayment terms
If you apply for a cash advance or payday loan, full repayment is typically within two weeks. Title cash loans are slightly different. Like other fast cash loans, you’re required to repay your balance in full within a reasonable time frame. However, you’re given more than two weeks. The lending company can spread repayment over several months, and you have the option of weekly or bi-weekly payments. Although these loans feature longer terms, it’s always best to pay off the balance as soon as you can. This reduces how much you pay in interest.
3. You don’t have to sell your car
If you need money for a home repair or medical bill, selling your car may seem like the only alternative. A title loan is like the best of both worlds. You can receive the cash you need, yet keep your car.
If you own your car outright, a title loan is the easiest financing you can find. There is no long application process, and in most cases, a lending company can approve your application within an hour. Of course, for this type of loan to be beneficial, you have to pay back your lender. If you stop paying on your loan, the lending company can legally claim your vehicle.