When you are broke and your rent is overdue or if you have another emergency that you need to take care of but lack the funds or the means to do it, a auto title loan can be your saving grace. If you have a car whose title is in your name, you can apply for a car title loan at companies, such as Sacramento Title Loans, so that you can access the cash that you need within a short timeframe.
To qualify for a car title loan, you typically pledge your vehicle as collateral by handing your title to the lender. The lender keeps this title until you are done with your repayments. Should you fail to pay the money back in a timely manner; the lender will repossess your car unless you opt to get into more debt by rolling your first loan into a new one.
Before you decide to get a car title loan, it is essential that you take the time out to educate yourself so that you can fully understand what you are getting into. Car title loans are usually very easy to get but they tend to be costly and can be a little hard to get out of when you do not have a proper financial plan or strategy in place to pay the money back. Here is everything that you need to know about car title loans:
The loan amount varies
The amount that you will receive when you apply for a car title loan will vary and will depend on the year, model and make of your car. Most lenders will not give you more than 50% – 75% of the estimated value of your car even if your car is worth X amount of money. If your credit is good, say above a 600 fico, there are several car title lenders, such as Cash Fast Lending, that are offering loans up to 120% of your car’s value. Loan terms also tend to be different from one borrower to the next.
You don’t have to have good credit
Since the amount that you will be given will be based on the condition and value of the car, you do not have to have good credit in order to get one.
Many are same day loans
When you walk into a lender’s office to apply for your car title loan, you get to walk out with the cash once you get approved for the loan. In California, a car loan can get you anywhere from $2,510 and $50,000, which is a big deal when you need emergency funds.
Figure out a way to pay it back
Unless you make timely payments, you risk losing your car to the lender. Therefore, before you walk into a lender’s office, make sure that you have a strategy to pay the money back.