Do you need extra cash, but you're leery about applying for a car equity loan? If so, you aren't alone. Many people assume that taking out a car title loan is a bad decision, but the truth is that car equity loans are a great way to get the extra cash you need quickly. Learn the truth behind these common car title loan misconceptions.
You Have to Have Good Credit to Get a Car Equity Loan
Typically, when you apply for a loan or credit card the lender reviews your credit history to determine whether or not you meet their qualifications. In most cases you have to have a good credit rating or you'll be denied. However, that isn't the case with car title loans. Car equity loans are secured with your vehicle. This means if you don't make your loan payments the company can repossess your car. Because the company has the option to take your car if you default on the loan, you usually aren't required to have a really good credit history to be approved.
Car Equity Loan Companies Take Your Car Until the Loan is Paid in Full
Many people don't apply for car equity loans because they think that the lender will take the car until the loan is paid, and they can't be without a vehicle. Fortunately, this myth isn't true at all. When you're approved for a car equity loan, you keep your car while you make payments on the loan. However, if you fail to make your loan payments the lender does have the right to repossess your vehicle.
Car Title Loans Have Hidden Fees
Getting a loan that's secured with your car title isn't any different than getting a loan to purchase a new car. Before you receive your money, you'll sign paperwork that details the terms of the loan. The paperwork tells you about any fees and interest rates that the lender charges, as well as whether or not you're required to pay any lump-sum payments. As long as you read the contract completely before signing on the dotted line, loan fees won't surprise you.
The fact is, car title loans work the same way any other secured loan works. When you take out a loan, the company holds your car title until the loan is paid in full. Your loan payments include any interest and fees charged by the lender, and as long as you make your payments on time, you shouldn't have any problems. So, there's no reason that you shouldn't apply for a car equity loan if you need cash fast.
To learn more, contact a company like DRIVEiT Title Loans.Share