Getting a car title loan is an amazing and helpful solution if anyone needs money in emergencies. Some situations such as medical emergencies, car replacement or repair, and even weddings may force you into an unfortunate circumstance where you need money fast.
Even in such moments, you should carefully read all the terms and conditions of the financing option that you’re opting for. Several people who are planning to take a title loan will find this blog helpful as it covers all the essential information.
What Title Loan Is All About?
It is a fast and efficient way of getting monetary help from a lender. Most people opt for this loan option to fulfill their urgent financial requirements. For instance, if you have an auto loan that is due but you do not have the money to pay, then all you need is to approach a lending institution and ask for a title loan.
A title loan is also known as a collateral loan and an equity loan. It is a secured loan and the borrower can easily get the money by using his vehicle as collateral. One should own a fully paid for vehicle such as a car, a truck, a boat, an SUV, etc. to apply for a title loan.
Why Do People Opt for a Title Loan?
Most people choose to avail this financial option because it is fast, easy, and convenient. Unlike other loans such as personal loans, these types of funds, you do not need to pay it back in regular installments. One can easily borrow money against the equity value of one’s vehicle. For instance, if you have an auto loan that is due and you don’t have the money to pay it back then you can get a loan that would cover part of your auto loan payments. Hence, you can pay off your car loan and use the cash this way as well.
Comparing Car Title Loans with Other Types of Loans
If you are planning to take a loan either for an urgent or vital financial requirement, then it is very important for you to compare all possible options before making up your mind. For instance, you should compare a title loan to overdrafts or cash advances. The latter two are also fast and efficient financial tools but they have some disadvantages as well. For example, if you avail an overdraft or a cash advance (also called a payday loan) then you may have to pay back your entire balance within just a few days.
The funds will get deposited into your checking account automatically so you won’t lose any time in getting the money. However, if you are unable to settle the balance on or before the due date then you may get charged with hefty penalties and extra charges. Therefore, before taking any other kind of debt-related loan, you need to bear in mind the various pros and cons available in the market.
How do Title Loans work?
Like other loans, title loan also have a process that everyone has to follow in order to get money through this loan. Firstly, you have to apply for a loan and you can do this from the comfort of your home.
Visit the online website of a lending institution and fill and submit the application form available there. Next, you’ll have to submit a few basic documents for the verification process.
Then the professional engineers of the institute will inspect your vehicle and calculate the equity value. You are able to borrow a loan amount up to the worth of your vehicle. After completing all the steps, you’ll get approval. You can request money disbursal immediately. The money will be transferred to your bank account and you can use it as you wish.
Advantages of a car title loan
A title loan can give a lot of benefits to the borrower as well. Some of them are:
- You can get the money immediately.
- The lender can check out your vehicle’s value before lending the money.
- The funds will be deposited in your bank account automatically.
- Some lenders such as Canadian Cash Solutions do not charge prepayment penalties for closing the loan account earlier than the due period.
- The loan term is long enough and may extend to four years.
- You can get this loan even if you’ve bad credit or no permanent income source.
- You can keep using your vehicle also while making monthly installments.
- There are no restrictions on the usage of money obtained through this option.
FAQs About A Title Loan
Are car title loans available in every state in Canada?
No. Although these loans are widely available, they are only offered in certain states of Canada. You can get a title loan in most states such as Alberta, British Columbia, Saskatchewan, Ontario, Manitoba, and Quebec.
What Are The Best Rates Right Now For Title Loans?
In most cases, the title loan rates will change according to the borrower’s credit rating. If you have a good credit score then you can easily get a two-percent or a three-percent rate of interest. However, if your credit rating is low then you’ll get a four percent or even higher rate of interest.
Does it cost you anything to get a car title loan?
No. It won’t cost you anything to get this loan because the money is given against your vehicle. You will have to pay only when you’re paying off your auto loan payments.
Who Can Opt For This Financing Option?
Anyone who is a resident of Canada can apply for this loan. If you have bad credit and also are looking for better job opportunities, you can also get the benefit of this option.
How do I qualify for a car title loan?
You’ll have to be at least 18 years old before applying for this loan. Besides, you should also own a fully paid automobile. The vehicle should belong to you and you should be able to use it as collateral as well.
What are the Loan Requirements for a Title Loan?
There are a few basic requirements that you have to fulfill before getting this loan. For instance, you have to submit your vehicle’s documentation for verification. Some of them are:
- A valid Canadian driver’s license
- Vehicle’s registration and insurance papers in your name
- Proof of permanent residency
- Vehicle’s second set of keys
Can I get a loan without having a title in my name?
The title of your vehicle is used as security. It is essential that you submit your vehicle’s title papers in your name to the lender. This is important for getting approval for the loan and some lenders may offer you a loan without a title but in that case, you have to surrender your vehicle to them. They will keep it until you pay back the entire amount you borrowed. Thus it is always better to get a title loan from an institution such as Canadian Cash Solutions as they allow you to use your vehicle even in the loan period.
You can proceed and get a title loan as your doubts regarding this option must be cleared. Thus, apply now and get rid of all financial troubles.