If you're facing a financial emergency, and the only thing you have of value is your car, you may weigh the benefit of selling your car for fast cash against the inconvenience of being without transportation. Another option might be to get an auto title loan. You'll still get fast cash, but you can keep driving your car. Here's what you need to apply for an auto title loan and the pros and cons of getting the loan.
How To Apply For A Title Loan
One reason title loans are appealing is that they are easy to get. You can get one of these loans even if you have bad credit. First, you'll need to know the requirements of the lender you want to work with. States sometimes regulate these loans when it comes to what is required to qualify and how much interest the lenders can charge. Individual lenders might have their own practices too. However, in general, as long as you own a car and its value is considerably more than the amount of money you want to borrow, you'll be able to get a title loan.
When you apply for a loan, take the car's title, proof of insurance, government identification, references, copies of your keys, proof of residency, and proof of income along with you so you'll have all the information you need to process your loan the same day. The lender probably won't run a credit check, and since there aren't many steps involved in qualifying for the loan, the loan is usually processed quickly so you get the money you need fast.
The Pros And Cons Of An Auto Title Loan
The benefit of getting a title loan is that you can get cash quickly in an emergency. If you have a toothache or other emergency and have no means to pay, then getting a title loan could be a lifesaver. Another benefit is you can get the loan with bad credit and you're not able to qualify for a personal loan. The downside to getting a title loan is the same as any other loan in that the loan may be hard to pay back if you're having financial troubles.
As long as you plan carefully, a title loan can help in time of trouble, but if you can't pay the loan back, your car will be repossessed and it could end up hurting your credit. While a title loan doesn't usually involve or affect your credit report, the company will probably report a failure to pay off your loan.
When you take out an auto title loan, be sure you understand the contract so you know how much you have to pay with each payment and how many payments you need to make. When you understand your responsibilities and know you can meet them, then a title loan could be the right move and mean the difference between suffering from a medical problem and getting quick treatment.