Let's look at the other side of the spectrum. How is this a good investment for the loan company? If we scroll back to the first few sentences in this article, we can see that the title loan company "uses the borrower's vehicle title as collateral during the loan process". What does this mean? This means that the borrower has handed over their vehicle title (document of ownership of the vehicle) to the title loan company. During the loan process, the title loan company collects interest. Again, all companies are different. Some companies use high interest rates, and other companies use low interest rates. Of course nobody would want high interest rates, but the loan companies that may use these high interest rates, probably also give more incentives to the borrowers. What are the incentives? It depends on the company, but it could mean an extended loan repayment process of up to "x" amount of months/years. It could mean the loan company is more lenient on the amount of money finalized in the loan.

Who Normally Looks To Apply For A Car Title Loan?

Car title loans carry a reputation for "bleeding the poor." The title lender does not chase after people to apply for loans, but it does offer quick access to emergency cash to those who own their own vehicle. The real fact in the matter is that being low-income is not a viable factor in who needs a loan. There are many different income levels that end up strapping people. It isn't the dollar amount as much as the management of said income. A major deciding factor in loan qualification has nothing to do with income, but rather or not you own a vehicle.

As comforting as this aspect might be to someone in an emergency situation, the applicant must remember that the short-term loan will need to be paid in 30 days. Since the loan is secured by the vehicle, it makes the payoff a top priority within the budget. For those with poor credit due to current financial difficulties, you will want to seriously consider how this loan will be paid off according to the loan terms and conditions.

Some car title loan applicants just need fast access to cash. Some employers offer pay cycles of one paycheck per month or bimonthly. Some emergency expenses my fall when paychecks are too far away to help. It is nice to have an option for fast cash during those times. A car title loan processes loans in as little as an hour. Where else could a person get a few thousand dollar loan the same day never mind in the same hour? The application is simple with many companies offering online versions to get one step ahead of the game. In fact, there are online car title loan companies keeping people in the comfort of their own homes. Find a title lender when emergency money is needed now.

Car Collateral Loans and Pink Slip Loans - The Facts About Auto Insurance

Car equity loans are subprime lending instruments given to borrowers with bad credit, who require cash quickly. They require only a pink slip as collateral so they are usually approved within minutes and processed in hours, provided all the requisite documentation is available.

Auto Insurance for Pink Slip Loans

When you take out car collateral loans also known as a pink slip loans, most lenders will hold on to the car equity or the pink slip while allowing you to keep and drive the vehicle. However, in order to protect their collateral, almost all equity loan lenders will require you to provide proof of auto insurance.

Depending on the state and the vehicle being insured, your monthly payments on auto insurance will fluctuate greatly. However, you can get discount offers almost everywhere. To find the best rates you should compare quotes online.

There are a number of reasons why companies will offer discounted rates. For example, if you take a safe driving course, have a car model that is high on safety features, and install anti-theft devices, all these factors will help you get cheaper insurance. Other factors that can lower your costs are driving accident or ticket-free for three years, or driving less than 10,000 miles a year.

If you have your home or another vehicle insured with the same company, you can get a discount. Getting insurance through a group plan, such as your employers or alumni association can get you cheaper rates too.

Some vehicle owners have taken pink slip loans in order to pay their car insurance fees. This is a bad idea because it is not what equity loans are for. Pink slip loans should be taken only if you cannot get cash from conventional lenders and have no other option. They are usually for emergency expenses and carry higher interest than conventional lending instruments.

If you use them irresponsibly and do not repay the loan on schedule as per the terms of the agreement, you could get caught in a debt trap with penalties, fees, higher interest rates, rollovers and balloon payments that could force you to end up paying many times more than the amount you borrowed.

Tips On Getting The Best Deals On Car Title Loans

Car title loans have been designed to solve urgent financial difficulties. You can apply for a car title loan online or in the lender's physical office. The steps to applying for a car title loans are usually easy but you have to be aware of certain tips to guide you.

#1: Do A Background Check On The Reputation Of the Auto Title Loans Company

Before making a decision on the car title loan company to choose, ensure to check for how reputable they are. How long have they been in existence? What are people saying about them? Do they have a physical office? All these are important questions to ask.

Another thing you need to consider before applying for a pink slip loan is if the lending company has the license to operate in your state or province. You will not be able to obtain a loan from a lender if they are not licensed to give out title loans in your state. Some auto title loans companies may be eligible to operate only in certain states so ensure to check for your state's eligibility before applying. There are certain regulations which vary from one state to another that determine what is required for a company to be registered.

#2: Find Out The Payment Options That Are Available

It is very vital to know how a lending company intends collecting your loan repayment. Do they plan on taking the payments through direct payment or from your paycheck? You will also need to find out precisely how long your loan will last. Just like other types of loan, the longer it takes for you to repay your loan, the lower amount of payment you will have to make per month.

However, the negative aspect of this is that you are going to be making more payments each month on financial charges. It is in your best interest to make sure that your loan is outstanding for a very short possible period of time.

#3: Find Out If They Charge A Pre-Payment Penalty

From the day your car title loan is given to you, your interest starts counting. Due to the fact that you wouldn't want the interest charges to keep adding up, you will want to pay off your loan before the due date in order to save money. But this can only be possible if you will not be charged a pre-payment penalty by the lending company. You have to ensure that your lender is not going to penalize you for making an early payment before agreeing to sign off your loan.

#4: Check For The Car Title Loan Application And Approval Process

This process differs from one lender to another. Others may require more verification either by putting a call through to you or requesting that you visit any of their physical branches with the required documents and your car for further verification.

#5: Check For The Kind Of Car Your Lender Accepts

Some lenders will accept cars manufactured from the year 2000 to the current year while others can still accept cars manufactured as far back as the year 1995. You also need to know the mileage restriction of the lending company.

#6: Ensure That You Can Keep Driving Your Car

During your application process, make sure that your lender can let you keep your car. There are lenders that will require your vehicle to be in their possession until you can repay your loan. Although this practice has greatly reduced, you still have to verify.

Auto Title Loans Are Based On Qualifications, Not Explanations

Are you going to head to an auto title loan lender for extra cash? Is the cash a necessity or for something extra? The title loan lender is not going to stop and ask those kinds of questions, it is not a loan requirement. Banks and credit unions will want this information, as their process is much different.

What you will use the money for or why you need it so urgently are not questions which apply to an auto title lender. There are no intrusive questions which apply to the cause of the financial emergency. What a title lender wants to know is based around the payoff. Because these lenders work with what are normally "riskier" applicants, the payoff is the focus for the application.

*What condition is the car in? Since the title loan is secured with the title to your vehicle, the value of the vehicle is extremely important and an evaluation will be done by lender provided appraiser. The auto title loan lender will need your vehicle on the premises in order to process the application.

*Bring in a current utility bill to prove your residence. Often times a license will not have the most current address. Since utility bills are paid each month, you will need to provide the most recent one.

A bank's application involves pages of documentation and questions to answer. The approval process may takes weeks and include an interview with the loan officer to find out more information. An auto title lender will not waste your time; as long as you bring in all the qualification information, once your car is assessed, you will know right away whether or not your application has been approved. Imagine driving away with the money in your pocket in what could be less than an hour! Fast money is simple when you use an auto title loan.