If you currently have bad credit and are in need of quick cash you might already have the answer to your prayers in your hands. If you currently have the title to your automobile in your hands you could be eligible for a car title loan. This article will explain to you how this can be accomplished.
What Is An Auto Title Loan
An auto title loan is a loan that can be obtained by a person who has bad credit and is willing to use his or her car as collateral. This will allow the borrower to borrow and amount of money that is based on the value of the vehicle being used as collateral.
How Does This Loan Work
The trick to obtaining an auto title loan is that you will need to have the title in your hand showing that you own the vehicle and there is not another loan on it. Your car will need to be paid in full with nothing else owed on it and the title is clear. Once you obtain the auto title loan the debt will be secured and held by the title. If you do not pay the loan back in full the vehicle will be repossessed and will become the property of the lender.
What Is Required
Obtaining an auto title loan is pretty simple as long as you have the title to the vehicle. However some lenders might also do a credit check and will require proof of your income. Not all lenders will do this due to the fact that the automobile is serving as collateral and they are protected against losing the money.
Due to the fact that these loans typically apply to the borrowers who have bad credit you will find that they will usually come with a high interest rate. This is the price you have to pay for having bad credit or little income. Auto title loan lenders can do this simply for the fact that they need to protect them against lending to people who are a risk and will cause them to lose money for not paying the loan back.
How Much Can I Borrow
The question of how much can I borrow is not an easy one to answer. This is because the amount you will be able to borrow will depend on what the value of vehicle is. This amount is based on the wholesale amount as well and may not be worth exactly what you seem to think it is. Before applying for this type of loan you should assess the value of your car yourself. Researching online or looking in the Kelley Blue Book can do this.
It is important to be sure that the lender you are planning on working with is a reputable lender and that they will offer interest rates that are competitive as well as flexible payment terms. You can find these lenders on the Internet as well as locally and you could be well on your way to having the money you need quick.