What is a title loan?
A title loan is a loan of money secured by a certificate of title to a motor vehicle. The title loan lender keeps the certificate in case the loan is not paid. A title loan is a way to borrow money on your automobile title. When you get a title loan you receive money on your automobile. The process is fast and easy. If you have a clear title in your name, you are eligible for a title loan. If you own your car, title loans can be a great short-term loan solution to your borrowing needs. Borrowers should be aware that Title loans, like any other type of short-term loan, attract a high interest rate. Once a decision has been made as to how much you may borrow, the title loan lender will hold the vehicle title document while you continue to drive the car. After the principal and the interest are paid your title document will be returned. The title loan lender must give each borrower, at the time the loan is made, a written title loan agreement.
A title loan works much in the same way as a payday loan. Used primarily by sub prime borrowers these loans are seen as a last resort; when there are just no other options. Many consumer advocacy groups keep close watch over title loan lenders since many of the borrowers tend to be in a desperate situation. The title loan is a type of secured loan; where a payday loan is unsecured yet both types are used as a quick fix often to pay immediate bills or to pay for living expenses. Car owners are offered up to 50% of their car’s resale value though this number is often significantly less. The APR or annual percentage rate, is generally very high often in the triple digits and can reach up to 300%. This fact makes title loans extremely dangerous. The penalty for failure to repay the loan is the loss of the car. Since so many sub prime borrowers utilize title loans many of them have only one car and loosing that car is a devastating blow to an already volatile situation.
A Cash Choice Title Loan is a quick and convenient way for someone, who owns their car or truck without any liens, to get cash using their vehicle as collateral. It allows consumers to use this asset to solve short-term cash flow problems without having to sell their car or truck. Without title lending, some consumers could be forced to sell their vehicle in a time of need.
