There are all kinds of loans out there and one amongst them on the rise is the Auto title loans. What exactly are auto title loans? Are they a good option? Do they have any limitations? We will help you by giving you these answers and answering all the possible questions regarding auto title loans. Taking a loan is always a big step and you need to look at the all the advantages and possible consequences before you do get one. So here’s all you need to know about the Auto title loans.
What is an Auto title loan?
An Auto title loan simply put is a loan which is raised against your car. It’s a loan where the car is put as collateral. There are no credit checks or any checks on your sources of income. It is purely given on the value of your car. The car is assessed by the lender and he gives you the loan money in accordance to the whole sale value of your car and the car will be with the lender till you pay off the loan. The time frames for paying off the Auto title loan varies but is usually less time than credit card payments and other loans. An Auto title loan is very similar to getting loans on the collateral of jewellery and other valuables.
Are you eligible for auto title loan?
There is only one prerequisite to getting an Auto title loan and that is to own to a car completely. If you are paying off a bank or any other lender to pay off a car loan then the car still belongs to that bank or that lender. So the car that you own must be completely yours with no dues left. The other requirements are the standard loan requirements like proof of identity, proof of address and some of the lenders might even ask for sources of income even though it’s not given much consideration. A lot of the Auto title loans can be received without proof of Income.
What are the benefits of an Auto title loan?
The benefits are of the immediate nature. If you need money immediately then the Car title loan can provide you that relief. The Auto title loan also is helpful as it needs minimum requirements and provided that your car is in good working condition, you should get enough to bail you out for the time being. The Auto title loan also comes without check on credit history and tight income source checks, so if you have a bad credit history then this should be the easiest way for you to get a loan quickly and without many complications. The Auto title loan is the easiest loan to get in comparison with all the other loans on offer. The Auto title loan is most useful for quick urgent fixes.
What are the limitations of an Auto title loan?
The Auto title loan might be the ideal quick fix especially when you do not have much security and a bad credit record, yet it comes with a few limitations. The Auto title loan firstly takes account of the wholesale value of the car. The Car title loan also has very high interest rates. The interest rates are usually calculated not yearly but in short spans of time. Therefore the interest rates can get really high when you look at it as a yearly thing. Even credit card interest rates look pale in comparison to Auto title loan interests. Another great limitation is that any late payments might most probably result in you losing your car. The time limit for the complete repayment of the Auto loans is also cut down drastically. There is hardly any time to pay back with such a high interest rate. The Auto title loan though a quick fix could turn into a much bigger problem in the long term and can lead to quite a few complications.
The Auto title loan can be a boon but it can easily turn out to be a bane. The interest rates are high, the time frame is little and you could lose your car. The money you get also would be relatively less because the wholesale rate of the car is taken into account. The interest rates could reach up to the sky if not paid off quickly. The Auto title loan should be treated as the last resort after exhausting all other possible options. If you are going to take the Auto title loan, take everything into account and take solid measures to pay your loans off and get your car back.