Auto Title Loans: Choosing the Right Financial Service

How is this a good investment for both the borrower and the title loan company? It is an excellent investment for the borrower. For this reason: Let’s assume that the borrower is in some kind of financial state at this point. This means the borrower may have lost their job, can no longer pay their rent, may need money for their child’s school fees; There could be a number of possibilities as to why the borrower is in search of instant cash. Depending on the borrower’s vehicle value, the borrower can get up to the maximum amount that the lending company can offer. Some lending companies offer up to $100,000, others may offer lower loans of up to $5,000. Of course, if the borrower drives a Mercedes or BMW, they will consider a higher loan value, but every title loan company is different.

Let’s look at the other side of the spectrum. How is this a good investment for the lending company? If we scroll back to the first few sentences in this article, we can see that the title loan company “uses the borrower’s vehicle title as collateral during the loan process.” What does that mean? This means that the borrower has given their vehicle title (proof of ownership of the vehicle) to the title lending company. During the loan process, the title loan company charges interest. Again, all companies are different. Some companies use high interest rates and other companies use low interest rates. Of course, nobody would want high interest rates, but the lending companies that can use these high interest rates are also likely to give borrowers more incentives. What are the incentives? It depends on the company, but it could mean a prolonged loan repayment process of up to “x” months/years. This could mean that the lending company is more lenient with respect to the amount of money locked in the loan.

Back to why this is a good investment for a title lending company (for all the people reading this who might want to start their own title companies). If at the end of the loan repayment process the borrower cannot come up with the money and the company has been very lenient with multiple loan extensions. The company legally obtains the security of the borrower’s vehicle title. This means the company gains ownership of its vehicle. The company can either sell the vehicle or give it to collections. So are auto title loan companies a scam? Absolutely not. The borrower only needs to be careful with their own personal finances. They need to know that they need to treat the loan like their monthly rent. A borrower can also pay off his loan. There are no restrictions on disbursing a loan. He or she can choose to pay it monthly or pay it all off in one lump sum. As in any situation, the sooner the better.

Auto Title Loans: The Pros and Cons

It is very helpful to analyze the pros and cons of a car title loan before deciding to take out a loan. Educating yourself about your financial investment before committing to anything is a great financial tool for success. A borrower must fully weigh their options before making a decision.

If you go online to most auto title lending companies and read their About Us, Apply Now, and FAQ pages, you will see just how biased their information really is. This is called false marketing. Just like the term “false advertising,” most of these companies never give the full truth about their business. They can hire outsourced journalists and columnists to write their content. Read the content before making your final decision. If the content is cheesy and uses images in its content, the company is probably bullshit. Writing jargon in articles isn’t something to brag about, but come on? For real? This is 100% necessary! An example of bad image content might be: “You’re tired of thunderstorms and rainy days, get a car title today and turn your day into a bright sun day”. The content shouldn’t be a story, if borrowers really wanted to read a story, they could take their “corners out” and read a Reader’s Digest article. The content should be in a nutshell to make the borrowers want to get a loan from the auto title lending company.

The Benefits of Car Title Loans

The clearest benefit would be the benefit of receiving instant money. Anyone can go to their local 7-11 store or supermarket and buy a state lottery ticket. This process is extremely simple; However, the probability of receiving a large amount of cash immediately is extremely small. The likelihood of getting instant cash from your local car loan company is extremely high. Unlike traditional banks and credit bureaus, another benefit of the auto title lending industry is that there are NO CREDIT CHECKS. Most of the time, borrowers come to tile loan companies because they are in financial situations. Their credit rating is usually poor at this point, after collection agencies have had to constantly make adjustments because they can’t pay their bills on time. That’s a big “pro” for an auto loan company. Regardless of the borrower’s credit rating, the borrower is still qualified to get a car title loan. Another benefit of the auto title lending industry (which was mentioned earlier in the article) is that it is easy to convince the lender to extend the loan to you since the borrower is posting their auto loan as collateral.

How does a borrower qualify? As mentioned, there is NO CREDIT CHECK, so the borrower is already pre-qualified for a loan at this point. However, the borrower must meet the following requirements to get a car title loan. The borrower must be over 18 years of age, the borrower must hold their vehicle title, have already paid off their vehicle deposit-free, and have a valid driver’s license or state ID card.

How long does the application process take? The simplicity and speed of the application process is another “pro” or advantage to the auto letter loan. The average online application only asks basic personal questions related to the borrower’s vehicle and location. Completing the application takes about a minute or less. Most companies will get back to the borrower within minutes of submitting the application. Once the loan representatives read the borrower’s application information, they quickly call the borrower based on the number provided in the app and discuss the details and the loan origination process.

How long will it take to get the loan? Each company depends and likely has a different credit process, but it usually takes 24 hours or less to get you the “instant cash”. That’s another benefit or “pro” of the lending industry. Traditional banks and credit bureaus can take up to a few weeks to complete the loans. By this time, the borrowers would have already lost their homes, been in deep debt, etc. Taking out a car title loan is the best financial choice. Check.

The Disadvantages of Car Title Loans

Now that we’ve looked at the advantages, let’s look at the disadvantages of auto title loans. Honestly, no financial decision is 100% perfect. Nothing is perfect, but some things come close. If this article were based on telling the reader that the auto loan industry is the best financial choice, then the article would be full of shit. For this reason the title with the ‘key word’ is ‘Choosing the ‘RIGHT’ financial service. Not the BEST. The ‘right’ financial service”.

Indeed, the downsides of a car title loan are manageable. The borrower basically pledges ownership of their personal transportation vehicle as collateral to the auto loan company in order to receive a cash loan. As already mentioned, depending on the company, the borrower can expect extremely high interest rates. If you have bad to no credit because of your financial situation and you learn that you cannot repay the loan, your vehicle will be confiscated and instead of paying off your debt, you will end up in even more debt. At this point, the collection agencies are completely done with you. The adage “Follow the instructions and it will turn out right” is extremely important and true when getting a car title loan. A borrower can also run the risk of taking out a loan from a shady company that charges extra fees on top of the interest accrued, or instant hidden feeds written in fine print in the contracts that are almost impossible to see. unless carefully observed with a magnifying glass. Therefore, a borrower needs to exercise caution before making a final decision in any financial situation, especially when their largest ticket holding is used as collateral.

Now that this article has thoroughly examined the pros and cons of the auto loan industry, it is up to the borrower to make the right financial decision. The final decision is the hardest part. The final step is always the hardest part as the borrower now has to make a final decision on whether to take out an auto letter loan or another financing option. Honestly, from what has been said in this article, it seems that choosing a car title loan is the right financial service. Again, banks and credit bureaus take too long to process a loan, so why choose them? If the borrower is in need of quick cash, they might want to consider opting for a car title loan.