Taking out a title loan is one of the best ways to get some quick cash with no credit check. Simple as it may seem, though, it also has its risks. Make sure you know how title loans work so you do not end up with more debt or without a car.
Read on to learn more about title loans.
How Title Loan Works
A car title loan requires that you own the vehicle completely. You will use the car’s title to borrow against the price of your car. You just need to pay the loan on the agreed date to get the title back. If you can’t pay the loan on the set date, you can choose to renew the loan within 30 days.
Title loans call for a lending company to assess the current value of your car and then give you a loan based on how much it is worth. Once approved, the lending company holds on to your car’s title until the loan is repaid. Make sure to pay back the money as agreed upon so you can get your car back at no additional cost.
Benefits of Title Loans
– While taking out a loan means giving up your title to the lending company, this doesn’t mean that you can’t continue driving your vehicle. Most lending companies refer to your vehicle title as collateral and return it after you make the final repayment.
– Title loans do not require a credit check to ensure that you’re creditworthy. The process is easy and simple. According to Utah Money Center, lenders only consider your ability to repay the loan when processing the title loan application.
– Compared to a cash advance and payday loans, most title loans have lower interest rates. This is because the loan is tied to your car.
Title loans are a convenient way of accessing credit quickly. It is important, however, to do your research first when taking out this loan. Look for lending companies that offer an affordable interest rate and allow you choose your own repayment plan.