When you're in a financial bind and need to borrow some quick cash, your options may seem limited. Applying for a conventional loan can take days or even weeks, after all. And what if you have less-than-ideal credit? You may have a hard time getting approved for an unsecured loan altogether.
Fortunately, if you own a car, you may be able to use your vehicle title to get a cash loan--sometimes in as little as a few hours.
What is a Car Title Loan?
Specifically, a car title loan is a type of secured loan. This means that you're placing collateral for your loan rather than going through the long and arduous process of submitting to a credit check and filling out an extensive loan application. With a car title loan, you're using your vehicle as collateral on the money you're borrowing.
Car title loans can be an excellent borrowing option for those who need quick cash as well as those with poor credit history. The funds you receive from a car title loan can be used for anything, whether it be paying an unexpected medical bill, covering rent, or buying groceries.
How to Get Approved For a Car Title Loan
The exact application and approval process for a car title loan can vary a bit based on the lender you're using. However, most lenders make it easy to fill out a quick online application that includes your contact information, as well as your driver's license number and some basic information about your vehicle. From there, your application will be tentatively approved pending verification that your car's title is clear (meaning there are no other lienholders listed on it).
Once you provide a copy of your car title, your loan can be approved--and funds may be disbursed to you same-day or typically within about 24 hours.
Things to Do Before Signing on the Dotted Line
Before you sign off on a car title loan, it's important to understand that you are literally placing your vehicle as collateral for this loan. This means that if you fail to pay off the loan according to the terms in your agreement, your car could be repossessed. With this in mind, it's vital that you understand your payment terms and interest rate--and that you've crunched the numbers to make sure you can pay off your loan comfortably within the allotted timeframe. If you can, then you can take out a car title loan with confidence and take care of your financial obligations!Share