What are car title loans? This is a way of borrowing money by putting the title of your car as the collateral. This is a good solution if you need fast cash. However, putting the car title as collateral is highly risky because the borrower can lose his or her car forever the moment he or she is not able to make payments for the loan. Car title lenders can easily take the car in their possession and it is almost impossible for borrowers to get it back.
Hence, it is important to know first how car title loan works and what are its advantages and disadvantages. Car title loans are given instantly without credit check as long as the borrower has full ownership of the car. This means that you can not take a car title loan if you are still financing the loan for your car. There are no other requirements except the borrower’s proof of income. What the lender would just do before approving the loan application is appraise the car. Borrowers can not borrow money that amounts to more than 50% of the car’s value.
The loan term for car title loans usually lasts up to 30 days only. What are the implications of such loan term? First, you have to make frequent payments. Second, you will be making payments at a really high interest rate. Lastly, you may end up incurring penalties and additional charges and eventually default on the loan if you can hardly afford to pay it.
These are just some basics on car title loans that you should already be pondering upon before getting a car title loan. Here are now some car title loans Nashville advantages and disadvantages which should likewise be considered carefully:
If you need fast and easy cash, getting a car title loan could be one of the best ways to get the cash that you need. Car title lenders do not require a credit check. Practically, it is only the borrower’s complete ownership of the car that is needed to qualify. The borrower can also usually get the cash they borrowed in a day or two. However, car title loans Nashville disadvantages seem to overpower the advantages. One disadvantage is the sky high interest rates in this type of loan. The interest rate can reach up to a triple-digit percentage. There are only few states that regulate the interest rate charged for car title loans. Another one is there could be additional charges, which are sometimes automatically added up, during the 30-day loan term.
People sometimes make decisions hastily like taking a car title loan. However, there could be other options of getting the amount they urgently need than taking a car title loan, which is beneficial but very risky.