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6 Facts You Must Know About Title Loans

If you’ve been studying about loans then you must have heard of title loans. They’re a popular option due to the ease they offer. In fact, over 2 million people enjoyed the benefits of a car title loan in 2016 and the number has only increased in the past two years.

If you need cash then it’s better to consider a title loan than to sell your car.

Let’s have a look at some facts about title loans:

  1. Your Credit Score Does Not Matter

This may sound too good to be true but it’s a fact. Companies like do not worry about your credit score. They're only interested in the collateral (your vehicle), which is enough to guarantee the loan.

2. You Will Still Have the Physical Possession of Your Vehicle

When you apply for a title loan, you will only transfer the title of the vehicle to the lender and not the physical possession of the vehicle. You’ll get to keep the car in your own custody and can get back the title once you pay back the loan.

3. You Can Get Thousands

While most people apply for title loans to meet short-term expenses, the fact is that the amount of the loan can be in thousands. The maximum amount of the loan usually only depends on the market value of your car.

For example, if your car is worth $10,000 you may be able to easily get a loan worth $8,000. However, in some cases, the lender may require that you have a regular flow of income.

4. Banned in Some States

This may come as a surprise to some but title loans are banned in several states due to a variety of reasons including their short terms and lump sum repayments.

However, this doesn’t mean that there is anything wrong with the loans. In fact, many experts believe that soon more states will unban title loan.

5. Be Aware of Scammers

Title loans come under several names and some title loans may not be title loans at all. Such cases were reported in Virginia and Missouri where customers were cheated.

Scammers are every where. It’s your responsibility to do proper research and apply for a loan when you completely trust the lender.

6. You Can Get The Cash Within a Few Hours

Based on the provider that you choose, you may be able to get the cash in hand within a few hours of applying for the loan.

Due to easy terms and conditions, title loans get approved very quickly and can turn out to be a safe option when you’re in a dire need.

According to a report compiled by the Consumer Financial Protection Bureau, about 80% of title loans are the result of a rollover. However, if you plan properly you will have no trouble in paying back the loan.

Do a good amount of research and find a reliable provider so that you have nothing to worry about.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes

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