If you are in a time where you are out of cash and need some help covering expenses, borrowing money may very well be your best option. If your credit score isn’t strong enough to help you qualify for an unsecured personal loan, one option you could certainly consider the option of taking out a car title loan.
If you need cash fast, a legit title loan could be a great way to go. Even better than that, you can apply, qualify, and get your cash transferred to your account all from the comfort from your own home thanks to your ability to apply online.
So, what is a title loan?
Title loans are secured loans in which you submit your vehicle’s title in exchange for a cash loan. You will be expected to pay your loan back, plus any interest and added fees, usually within a short amount of time. Once you do repay your loan and all the added fees, you will get your vehicle’s title back.
If you prove unable to repay the loan, you may face the nasty repercussion of having your car repossessed. That’s because if you default on your loan, your lender will need to recoup their losses. They’ll do that by auctioning off your car and selling it.
How do they work?
With legit title loans, you will be using your vehicle’s title as a guarantee so the lender knows that whether or not you pay your loan back, they will get their money back. It is crucial to note that even though you are trading in your car’s title for the loan, you will be able to drive your car while you are paying off your loan.
Title loans are, for the most part, small loans – usually worth from a couple hundred dollars to a few thousand dollars. It is also important to note that while the amount of your loan is based on the value of the car, it will never be equal to the value of your car. Instead, your loan will typically be worth somewhere between 25 percent and 50 percent of the value of your car. That’s because if you do default on your loan, and your lender has to sell your car to recoup their losses, they’re not going to want to waste time finding a good price. They’re going to sell your car for a reduced price, which means 25 to 50 percent of its total worth. Make sense?
How do you qualify for an online title loan?
Since title loans are based on the equity you have in your car, title loan companies will first and foremost need you to be the owner of your car. That typically means having a lien-free title.
You can, however, still qualify for a legit title loan even if your car is not fully paid yet. You must, however, be enough equity in it for you to qualify.
The best legit online loans understand that the situation of each borrower is different so you need to be upfront and discuss your situation with them in order to get the best loan suited for you.
If you believe you are ready to take out a car title loan, the best way to find legit title loan lenders online is to start a simple online search. There are a few things to keep in mind when you are searching for the best online title loans available in your state.
Make sure to look out for:
- Length of operation. Making sure that a title loan company has years of experience under its belt will help you focus on the best and most dependable lenders. First off, you will have someone who you can consult who has seen it all in the industry. Beyond that, you will know that if they have been in business for years, it probably means they’re pretty good at what they do!
- Interest rates. This is another crucial thing to keep in mind. Interest rates will dictate how much you end up paying beyond just the value of your loan. Interest rates for car title loans are typically quite high – annual percentage ratings can often reach 300 percent – but that doesn’t mean there isn’t variance within the market. A single percentage point could end up saving or costing you hundreds of dollars in the long run, so make sure to pay attention to it.
- Customer testimonials are another thing to look out for while you are searching for your best online title loan. Some companies will offer customer testimonials on their site. If they do not, you should be able to easily find them online. If, however, you find yourself struggling to find any kind of testimonials, it is probably best to stay away. It can be stressful applying for a car title loan completely online, but testimonials can be a great way for you get a good feel for how a lender operates and runs their business.
How do you repay your loan?
Usually there are three different options for repayment. You could repay in person – though that might defeat the purpose of an online title loan, you could pay online, or you could use an automated payment system. The latter option means that you should authorize the loan company to periodically take certain amounts straight out of your bank account.
Don’t worry, though, it is impossible for the lending company to make these automated repayments unless you have personally authorized them to do so. Unless you have authorized it, your lender will have withdrawn money illegally.