You can borrow money in a few ways today from conventional bank loans to payday loans. An option to consider if you have a car is a title loan. These loans let you borrow money and use your vehicle to secure it until it is repaid. Here are four reasons to use a car title loan when you need cash.
Your Credit Score Does Not Matter
One of the main reasons to use a title loan is that your credit does not matter. You can get this type of loan even if you have bad credit, declared bankruptcy recently or have no credit at all. All you need is proof of residency, a clean car title and a bank account. Your income and credit history are irrelevant because you are using your vehicle as collateral against the loan. This means if you do not pay, then the lender will just sell your car to recoup the loan money. Being able to take out a loan without needing good credit is a very useful option especially if you fall behind on bills that might have lowered your score.
You Can Borrow Money Fast
A second reason to get a car title loan is that you can borrow money fast. The reality is that a number of traditional lending channels require you to wait for a long time before you even know whether you are qualified to request a loan. This means you could spend days or weeks in a period of uncertainty not knowing whether you will get the money. Title loans can often be approved in hours. With 76 percent of Americans living from one paycheck to the next, this is very helpful. If an unexpected expense comes up that you need to pay, then you can immediately get a title loan to deal with it. Fast approval cannot usually be found with most other types of loans today.
Your Borrowing Limit Is Based Largely On the Vehicle Value
Large banks frequently use a specific formula to determine how much money you can borrow when requesting a loan. The bank looks at everything from your income and assets to your demographic information and bank account history. The result is that you might not be able to borrow very much. The borrowing limit for car title loans is based largely on your vehicle’s value. This works in your favor since average used car prices are around $14,375. You can borrow a good percentage of the value of your vehicle to handle even the largest bills and emergencies.
Repayment Is Flexible and Easy
A final reason to use car title loans is that repayment is flexible and easy. Other options like payday loans force you to pay money back within a week or two. Title loans give you the option to spread your payments out over multiple months. This allows you to repay the loan without bankrupting yourself or forcing you to live in poverty. You can create a repayment plan that works for you and your income. This will help you to remain financially stable and healthy.