We are sure you’ve heard the term equity. Your parents told you that it’s better to have equity in a home instead of renting. But, equity doesn’t just apply to homes.
Do you own a car? Then you have equity and if you’re facing some hard financial times, a title loan can help. So, how can a title loan help get you some quick cash?
Read on for more info about car title loans and how to get one.
Title Loan Help Utilizes the Equity You Have in Your Vehicle to Get You Approved for a Loan
It’s simple to get approved for a title loan. The title loan company will ask you to provide a few documents and proof of identity and you can be on your way with your cash in no time.
A title loan works by you putting up your car title as collateral. Kind of like when you go into a pawn shop, you give them your item and they give you cash. When you pay them back the cash in the time you’ve agreed they give your item back to you.
Instead of an item, a title loan company will require the title of your car to hold onto until they receive the amount of the loan back. If you fail to pay on the loan, they can take ownership of your vehicle. This is why it’s important to know how you’re going to be able to pay the loan back in the schedule allotted.
Here are some of the items you’ll need to provide when applying for a title loan:
- Your car’s physical title
- Driver’s license
- Social security card or birth certificate
Keep Your Car While You’re Paying Back the Loan
Because the title is what is held by the loan company, you get to continue to use your vehicle as normal during your repayment period. Everything stays the same as long as you continue to make payments on time.
There are some rules on who can apply for a title loan. You must be:
- Over the age of 18
- Be the owner of the car named on the title
- The title must be lien free
- Bring the vehicle for a visual inspection
- Have proof of regular income in the form of pay stubs or other paperwork
Once you have filled out the application, proven you meet all the requirements, and handed over your title, you’ll be good to go cash in hand.
Is a Title Loan Right For You?
Title loan help, similar to payday loans, seems appealing due to the ease of access. It’s a simple application process and you’re practically guaranteed approval.
However, think about the ramifications of defaulting on this type of loan. Can you afford to lose your car? How will you get to work? Is this extra money really necessary? Before taking out any type of loan sit down and make a plan on how you intend to pay the money back.
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