Benefits of Car Title Loans

September 23, 2011

Car title loans allow you to qualify for a loan quickly and easily by tapping into the equity in a vehicle that you own. Your car, motorcycle or other vehicle is a valuable asset and the money you paid for that vehicle is essentially trapped in that asset and not accessible to you or “liquid.” A car title loan allows you to use this asset to your advantage by taking a loan and using your vehicle as collateral.

Benefits of Car Title Loans

There are many benefits of obtaining a car title loan instead of borrowing money from a traditional bank loan or taking a loan from friends or family. While car title loans are not meant to be a permanent solution to financial problems nor a long –term form of financing, car title loans can provide you with a longer-term loan than payday loans. Because you can continue to drive your vehicle even after taking a car title loan, you also get to enjoy the benefits of your vehicle even as it makes it possible for you to get the cash you need. With some car title loans, you may take as long as 5 years to repay the money you borrowed. While that should  give you plenty of time to get your financial life in order, at the same time there is no penalty for paying off much sooner, as most people do, to reduce the interest paid.

When you take a car title loan, your lender may also be willing to work out a repayment method for you according to a schedule that works. This may mean weekly, bi-weekly or monthly payments. Since you aren’t borrowing from friends or family, you can repay these loans over time without feelings of guilt or strained relations every time you see your friend or family member.  Risking important relationships over matters of money generally turns out badly, and for that reason should probably be used only as the last option.

Another major benefit to car title loans is that you have the ability to obtain a loan quickly and easily, even if you have bad credit. There is typically no credit check associated with a car title loan since the car acts as collateral and secures the lender’s  investment. You may have to show that you have the income to repay the loan, but requirements are generally not stringent and qualifying for a car title loan is much easier than qualifying for a bank loan.  Because the process is based primarily on the vehicle, you may have an answer on your loan in as little as a few minutes, and receive the cash you need the same day within just a few hours.