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Do you find yourself in need of some liquidity these days? If you do, and other sources of capital have been slammed shut (family, friends, banks, etc), then it’s understandable that you might feel that you have no options available to you.
However, if you have a car that belongs to you, title loans are definitely worth a look. In this post, will will give you a brief rundown on how title loans work…
Do you own your vehicle free and clear?
The answer to the question, “how does a title loan work?” begins with the question, “Do you own your vehicle?”. If you have paid off your vehicle’s bank loan in full and possess its title, then you qualify for a title loan.
If you rent or are underwater on your mortgage, and don’t possess any other assets of real value, then this fact will allow you to borrow a significant sum of money for whatever purpose for which you need it.
Credit checks are frequently not part of the loan application process, so if your score has taken a beating over the years through no fault of your own, this is a great way to get your hands on some badly needed cash fast.
The only documents that are required is proof of income, permanent address, the title of your vehicle and some character references, and you’re good to go!
The lender appraises your vehicle
The amount you can be lent will depend on the present value of your vehicle. The maximum amount will vary on the model, its age and condition. When they arrive at a number, they’ll approve you for a loan based on a percentage of its appraised value.
They loan you money, with your vehicle held as collateral
If you agree to the amount assessed and the terms of the loan, sign on the dotted line and the cash will wired into your bank account within a business day or two.
They’ll hold on to the vehicle title as collateral, but despite this, you’ll be allowed to drive away with your vehicle, free for you to use normally over the life of your loan.
You pay back your loan over the agreed term
During the course of a title loan, as long as you make payments on your loan on time and complete them by the end of the term, you’ll get your vehicle’s title back, and life will go on as per normal.
So long as you fulfill your end of the bargain, you won’t end up in trouble surrounding the ownership of your car or truck.