A car title loan is one a borrower takes out using his or her vehicle’s title as collateral. If a person owns a car or has one almost paid off, this type of loan is fairly easy to get approved. After the borrower agrees to pay fees, the lender typically gives him or her 30 days to pay the loan off.
What’s Involved in Getting a Title Loan?
The average title loan requires a person to show collateral. This loan doesn’t always require proof of income, but a monthly salary of more than $1,000 is a requirement for many companies. This loan is rarely based on the person’s credit score. It can be for up to 50 percent of the vehicle’s value, and it requires the borrower to hand over the pink slip for his or her car.
What if a Borrower Needs More Time to Pay?
The borrower can often roll the loan over to another month to get more time to pay off the loan, but this will require paying another monthly fee. If this happens multiple times, the fees will probably get too high to pay the initial loan off. Every company has a different policy on grace periods for late payment or nonpayment.
What Happens if a Borrower Defaults on a Title Loan?
When they face the possibility of defaulting on their title loans, San Diego residents understandably worry about what the lenders will do. Lenders have to make sure their businesses follow their states’ repossession laws. These companies aren’t allowed to make verbal or physical threats or take assets by force, and they can be sued for violating state and federal laws.
Many people wonder if they can be prosecuted for defaulting on a car title loan. The answer is no. If the borrower defaults on the loan, he or she will have to hand the car title over to the lender. If the borrower cannot pay off the loan within the time agreed upon, the lender will keep the pink slip and the vehicle. The lender will take the vehicle after sending the borrower a notice about it first.
To prevent a default, it’s always good to check other financial resources and institutions before deciding to take out a car title loan. Some options include bank loans and credit cards. Check the APR, fees, and payment terms for each option to find a fit for your situation. A title loan should be your last resort, and even if you choose this type of loan, compare the various companies. Some have lower rates than others.
When I need a convenient, easy way to get quick cash, I search for a reputable company that offers car title loans near me. San Diego residents who own cars and want high-quality service can count on the trustworthy folks at Payless Car Title Loan. Our loan approval process is easy, and you’ll find the highest levels of professionalism when you work with our team. Call us today at 619-600-0061 to find out how we can help.