Borrowers use their car to get money from the banks or other financial institutions. They need to deposit the copy of their vehicle’s title and the keys to the bank that is loaning them the much desired funds. Such types of loans are known as car title loans. Ensure that the title you have deposited is free from any kind of liens. You could avail them for a short duration of time. Once the money is repaid, you will be given back the documents of your vehicle and the key.
While offering the money, most of the lenders overlook the credit scores of the borrowers, but they do thoroughly check the condition of the vehicle. The lender will confirm the resale value of the car and then proceed ahead. Usually, banks offer the borrowers about 30% to 35% of the resale value. You could achieve these loans in about 15 minutes or even less than that.
Eligibility criteria for the loan has been mentioned below-
- You need to be 18 years old or above
- Those who have their own social security card are eligible
- You need to have a driver’s license
- Insurance for the vehicle is very important
- You need to have a secure source of income
Procedure to be followed before lending the money
Terms and policies of different lending institutions vary and so doe their lending procedures. However, they follow certain strategies before making the final decision. Before offering you the money, any bank will check a few parameters. They will see whether you have the ability or the sources to pay back the monthly installments with interest charges.
Those who are unemployed may face difficulty in repaying the amount. Hence, they check the current income of the borrower. Once they have analyzed these aspects, they decide the amount to be paid back every month. They will transfer the money to the borrower’s account within 1- 2 days after the decision is made. Lenders will allow you to drive your vehicle till you make the repayments on time.
Steps to be taken before borrowing the money
Before taking the loan, you could compare the quotes of different lending institutions online. Opt for the company that offers you good loan amount and ask you to pay less interest. Thoroughly check each company’s websites that interests you and understand their terms and conditions well. Besides this, you could check their background and experience in this field.
The benefits of availing loans online
These days, it is much easier to avail loans online. You do not need to visit a bank and apply for a loan. Rather you could switch over to a much more convenient way and fill out the application online. They will ask you to send car insurance papers and the details of model, make and mileage of your vehicle. Once the procedure is complete, you will get the money within 24 hours.
The best part of these loans is that they are easy to pay back too. You could use the loan amount for any purpose like studying, remodeling your home, and travel to name a few. Mostly, people borrow the money in case of emergencies.
What might happen if you do not repay the loan?
If in any case you are not able to make monthly repayments, it will be carried further to the next month. This will increase the rate of interest on the loan each time you miss to repay. It could put you in further trouble. Hence, it is advisable to think twice before borrowing money. If you are not able to pay back the amount, you will lose your vehicle.