Car title loans are short-term loans that use vehicle titles as collateral. While it’s an easy type of loan to get, a car title loan can end up being very expensive. Some car title lenders also offer loans to customers who are still paying on their vehicles and don’t have the titles in their possession just yet. These loans usually come with an even higher APR than any other form of credit. It’s important to remember that lenders can and will repossess a vehicle if the loan isn’t paid in full.
Applying for a Car Title Loan
Many borrowers opt for car title loans because they have poor credit and cannot secure loans elsewhere. They may not have much in collateral, so they turn to the value of their vehicles for loans. Some lenders offer loans worth 25 to 50 percent of the entire value of vehicles, which means a customer can borrow anywhere from $100 to $5,000 in exchange for the title. In some cases, lenders may offer up to $10,000.
Car title lenders typically operate out of physical locations, and some even offer online title loans. San Diego loan applicants typically don’t have to go through credit checks, a plus for customers who are struggling with credit issues. A borrower usually needs to bring in the vehicle, a photo ID, the title, and proof of insurance to finish the application. Some online lenders have been known to approve applications without physically seeing the vehicles, but this is rare.
Paying the Loan Back
Depending on the terms of the loan, the borrower has a set amount of time to repay the money in full. Typically, loans are good for 30 days. A borrower who cannot repay the loan in that time will have a couple of choices. The first is an extension, or rollover, which means the lender extends the amount of time the borrower has to pay the original amount. However, a rollover will always include additional fees and penalties.
Repossessing the Vehicle
The car title lender does have the legal right to repossess the vehicle if the loan isn’t paid in full. Once the payment is missed, the company can repossess the vehicle that was put up for collateral. In most cases, the lender will try to work with the customer before this happens, but there’s no guarantee the lender won’t immediately repossess the car. Some lenders install GPS trackers in vehicles during the application process. If the borrower doesn’t pay the loan back and tries to hide the vehicle, the lender then has a way to track it down. Once the lending company has the vehicle in its possession, it will then sell the car to recoup the money that wasn’t repaid during the loan term.
If you’ll be able to pay off the loan in the specified amount of time, a car title loan may be the perfect option for you. For fast, convenient auto title loans, San Diego residents rely on the high-quality service from the team at Payless Car Title Loan. To find out how we can help you use your vehicle to secure a short-term loan, give one of our friendly representatives a call today at 619-600-0061.