A title loan is often referred to as a car loan or an auto loan. It is a short term loan where the car title of the borrower’s car is put up as collateral. These loans are for typically 30 days or less and if the loan is not repaid within the time frame, the lender can then take ownership of the car that was used as collateral. Title loans have higher interest rates than other loans usually because the lender does not do a credit check and the only requirements for the loan is the condition and value of the car.
The reason for a loan is to get cash quickly with little or no hassle. For many people today, qualifying for a loan is more difficult and has turned into a very loan process. Bad credit and high monthly payments become two problems for those who are applying for any other type of loan.
A loan allows the one who is borrowing to still posses their car when the loan is active. The maximum amount of the title loan is all determined by the collateral used. A typical lender will provide up to half of the car’s resale value, though there are few who will go higher. The borrower of the loan must have clear title to the car; meaning the car must be paid off with no current financing or liens.
The interest rate of a loan depends on the state the lender is located. The interest rate usually ranges from 36% to 651.79% and the payments will vary but the borrower does have to pay at least the interest of the loan each month.
Online long term installment loans can usually be approved within 15 minutes or less for a loan as little as $100. There are some other lenders will not loan give out a loan under $1000 to someone who does not have credit. Before being approved for a loan, the borrower must first verify employment and regular income. Credit is not considered while the loan is secured the car’s title.