If you are strapped for cash and are looking for a source of cash, have you considered getting an auto title loan? This can be a convenient way to release funds quickly to cover an emergency expense.
If you are wondering “what is an auto title loan” and “how can a title loan help me?”
What is an auto title loan?
An auto title loan works the same way as a payday loan. You take out a loan for a small amount of money for a short period – usually 15 to 30 days, although in some cases you can get a loan for up to a year.
How to get a car title loan
To get an auto title loan, you give the title of your car to the lender as collateral until you have paid off the loan in full. You don’t need to go through a credit check, so this is an option if you have a bad credit rating and couldn’t get a loan from a bank.
How much money can you borrow? The amount depends on the value of the car, but you can usually borrow between $ 100 and $ 5,000, although in some cases you can get up to $ 50,000 as well.
Why Apply For A Car Title Loan?
There are several advantages to an auto title loan over other forms of borrowing. Here are five reasons why this might be a good option for you.
1. Get quick access to money
Auto title loans are great because they are quick. You can complete the application process in under an hour. In some cases, you can even apply online. All you need to do is show your ID and your car papers.
2. Cover emergency medical bills
If you are faced with unforeseen medical expenses not covered by insurance, an auto title loan can help. If you need to see your doctor or dentist and you don’t have enough savings, you can use the loan to make the down payment.
3. Close the income gap
Whether you’re strapped for cash before payday, or worse yet, lost your job, an auto title loan can close the paycheck gap. The loan can cover unforeseen expenses that arise or pay for essential expenses like bills, food and transportation to get to work or a job interview.
4. Make easy refunds
You can repay the loan in several convenient facilities, which helps you plan your finances. This is especially important if you are getting the loan to cover an emergency expense and need a few days to raise the funds.
5. Avoid selling goods
Rather than having to start selling your business online or at a garage sale to cover your expenses, you can borrow money against your car. Plus, the lender doesn’t keep your car while you have the loan, so you can keep using it for commuting.
Decide if an auto title loan is right for you
While loans that only require car titles as collateral can help you when you are strapped for cash, you should be aware of the downsides. An auto title loan will have a high interest rate and can cause you to end up in a cycle of debt if not handled properly. If you don’t make your repayments on time, your car could be taken back. If you’re going to use your car as a financial asset, check out our suggestions for making it last longer.