Getting strapped for cash can be one of the most stressful things in life. Depending on your situation, you could use some of your possessions as collateral against a loan.
When you do this, interest rates will be high so you want to be sure you can pay the loan back in a reasonable amount of time. That being said, these loans can be a great way to get out of a jam in a short amount of time.
One such loan is a car title loan. But what is a car title loan? We’ll answer that question for you and more in this article.
What is a Car Title Loan?
You may be surprised to find that even though you don’t have a car that’s worth a whole lot, you may be able to get a decent loan if you use it as collateral.
So, how does it work?
Getting a Title Loan
The process typically involves stopping by a physical location or talking with a professional online. Someone will walk you through getting an appraisal on your vehicle to estimate the size of the loan you’ll be able to get from the title.
The nice thing about car title loans is that you don’t have to hand over your vehicle like you would if you were dealing with an item at a pawn shop. You simply hand over the title, and the company can potentially take your vehicle if you fail to pay the loan.
Once the fine details have been worked out, you’ll be able to get your loan, set up a payment plan, and receive information on the interest and estimated payments of the loan.
Things to Keep in Mind
Car title loans are an excellent option if you need cash quick and have the means to make complete payments relatively quickly. You could be facing very high annual interest rates, and depending on the loan, that could put you in a difficult situation.
A good time to get a loan would be if you needed money and were scheduled to be paid within a month of the time you received your title loan. That way, you could receive the loan and knock out a sizeable portion of the principal amount of the loan.
That said, sometimes you need money fast! When there’s a disaster and insurance won’t help you, when you need to post bail from jail, or if there’s some unforeseen emergency, you will need money in your hand.
Those are all situations when you should keep car title loans in mind.
Want to Learn More?
Car title loans are great options for people who are in need of a quick fix. When you’re a little more flush, however, we’ve got tricks and tips that will help you keep your vehicle in tune.
Visit our site to learn more about how you can fix up a vehicle yourself.