An emergency is part of everyone's life. Some emergencies need immediate cash to solve. But what if you do not have the required cash at that time? Cash Title Loans are best for these types of situations. Wondering what a cash title loan is. Invest some time in reading this article, as this article will clear all your doubts about cash title loans.
Title loans are the fastest way for people to get the cash loan they need. While the terms of these loans are not always popular, cash title loans make it possible for people to get the cash they need. This blog will look all about cash title loans. Let’s start with the definition of the cash title loan.
What is a cash title loan?
A title loan is an unsecured loan that needs a vehicle like a car as security. Since your car is security for the loan, the lender may seize your car if you fail on the loan. Typically, title loans are short-term, high-interest loans with limited conditions.
This loan is the best for two types of people. First, start with a person with a low credit score, as the applicant's credit score is not considered when calculating loan eligibility. Second, a person who needs a loan urgently as a title loan can be approved extremely fast for sums as low as $100 due to fairly strict application requirements.
As you have read in this section, you can borrow cash for the short term with a title cash loan. But the question is how much money you can borrow with this loan. If you want the answer to this question, the next section will be helpful for you.
How much money can you borrow from the cash title loan?
The range you can borrow depends on your specific circumstances. However, you can borrow between 25% and 50% of the car's worth. However, lenders typically permit you to borrow between $100 and $10,000. But some lenders may allow you to borrow even more than $10,000. The loan term is two weeks to one month, like a payday loan.
So now, you might be wondering how title cash loans should work. So if you want to learn the working process of the cash title loan, the next section will be helpful for you as it will cover the working process of the same.
How does cash title loan work?
Car title loans are the most typical type of title loan. As long as you are the sole owner of your car and have a lien-free title, you are eligible to apply for a title loan through a lender that offers them. While applying, you must show your vehicle, ownership documentation (such as the title), and driver's license to the lender.
You will have to hand over your car after loan approval. The loan provider will lend the borrower up to 25% of the car's overall worth. Title loans usually have terms of 30 days, although the lender will decide your loan's terms. You must pay back the borrowed amount along with any associated fees and interest. Lenders typically charge 25% of the loan amount every month or an annual percentage rate (APR) of at least 300%. The lender will sell your vehicle if you fail to repay the total amount.
You might consider borrowing the cash title loan immediately to cover your expense. But you should be prepared to borrow Cash Title Loans. Want to know why? The following section will help you understand why and how you should be prepared to borrow title cash loans.
How to be prepared for borrowing the title loan
Indeed, title loans are the best way to borrow money immediately. But you might be tensed to know that 20 percent of borrowers of title loans fail to repay the loan amount on time, as per the survey by CFPB. More than half of auto title loans result in long-term debt, and more than four out of every five auto loans are refinanced because borrowers cannot pay them off in full with a single payment.
It would be better to find an alternative way to repay the title loans. If you did not find a suitable path for the repayment of the same and did not want to lose your vehicle, so it would be best to switch to other finance options, like a payday loan from the credit union, a personal loan from an online line, a credit card, and more.
I believe you have gained almost everything about the title loan. But you might be shocked knowing that cash title loans have a few problems that can become your headache. If you have decided to take a title loan, read the next section to be aware of the problem of borrowing title loans.
Problem with the title loan
As you have read in this article, title loans are suitable for people with low credit scores who want immediate loans. But you have to face several issues after borrowing these loans. The following are some of the problems that you might face after borrowing these loans-
1. Expensive
Cash title loans are relatively more expensive than other types of loans. You have to pay at least 25 percent interest rates. For example, suppose you borrowed a loan of 1000 dollars; you have to pay 12500 dollars at the end of the month.
2. Short repayment term
Another con of a title loan is the short repayment term. You must repay the total amount, interest, and other fees within 15 to 30 days. Unfortunately, a 15-30 days repayment term is not enough for most ordinary people.
3. High risk of losing a vehicle
Last but not least, you will take the risk of losing your vehicle after borrowing a cash title loan. This is because the lender would seize your vehicle if you did not repay the total loan amount.
Conclusion
Cash Title Loans offer borrowers an easy and quick way to access cash when they need it most. A title loan is a way to go if you're looking for a way to obtain cash quickly. However, these loans may be expensive, so make sure you understand what you're getting into before applying.