If you need cash in a hurry and do not want to go through the hassle of applying for a bank loan, you should consider a car title loan. This short-term loan is designed to provide the borrower with a quick cash infusion, which is then repaid with interest over a predetermined period of time. According to data from the Federal Deposit Insurance Corporation, over 1.1 million households in the United States used car title loans in 2013.
The reasons why people choose to take out a car title loan vary widely. Some people need the additional money to handle an unexpected expense, such as a necessary repair to their home or their car. Other people use the loans to bridge the gap between when their funds are low and the next time they get paid.
Many people choose to obtain a car title loan to get cash when their financial options are limited. These loans often have no credit check involved, meaning that anyone with a suitable car will qualify for a loan. Online car title loan companies, such as usacartitleloans.com, provide loan applications that can be completed in as little as a few minutes and loan decisions are rendered quickly.
To obtain a car title loan from one of these companies, you will need to have a vehicle with a clean title. The title of the car is turned over to the car title loan company as collateral for the cash you are asking for. The company holds on to the car title as you repay the loan amount and interest in installment payments. Once the loan has been paid in full, the car title is returned to the owner and the account is closed.
Car title loans can have terms as long as two years or as short as a month. The amount of time that you have to pay back the loan may depend on where the loan was acquired. For example, in the city of Austin, Texas such short-term loans must have terms no longer than three months.
The loan amount is capped at a percentage of the car’s’ estimated resale value, so you can get higher loan amounts for newer vehicles in excellent condition. If the loan payments are not made in a timely manner, the loan company has the option to repossess the car in lieu of payment. However, borrowers that get into financial trouble generally have the option of working with the lender to come up with a plan to avoid default.