Auto title loans are the next best thing to ATMs, those wonderful machines that dispense cash at the touch of a button, and like the ATMs, vendors of these loans have perfected the art of delivering cash to customers quickly without hassles when people desperately need the cash, and when people are turned away by the big banks and financial institutions in their hour of need. Not only the title loan lenders, the customers too are smiling, and the auto title loans industry has burgeoned into a multimillion dollar industry in America. As in every other industry, the consumers need to approach the lenders taking reasonable precautions. Here we attempt to answer some frequently asked queries regarding such loans-
- – Why is it so difficult for a Bank to release a small $2,500 loan, that too for tiding over a personal cash emergency?
Banks, by and large focus on long term lending that is secured by collateral of your home or landed property, they generally avoid smaller loans as these are perceived to be less profitable and more risky.
- – How are title loans superior to bank loans in meeting the emergency cash requirements of consumers?
vehicle title loans specialize in extending short term loans covering smaller cash requirements under $5,000. These loans are extended at considerable risk by the lender who refrains from conducting any detailed credit check or income verification of the clients, simply because his aim is to deliver the cash as quickly as possible to his client, regardless of the risk.
- – Would I be eligible for title loans even when I don’t have a salaried income or Bank account?
Auto pink slip loans as they are called in California, are ideal for sole proprietary businesses, single parents, salaried workers, disability affected people, retirees and pensioners and even those having a history of bad credit, that find it difficult to secure bank loans; all they need to do is to show some tangible proof that they have a steady income that is adequate to repay these cash title loans. That proof could be by way of sales invoices, cash receipts, revenue payments or a bank savings account. Salaried workers can provide their latest pay slips.
- – Exactly what do I need to do or submit to become eligible for auto installment loans in California?
– You need to be a US citizen, aged 18 years or above.
– You require a valid driver’s license.
– You must have California car title registration (pink slip). If it’s from another state, the DMV will have to register it in California. These formalities will be taken care of by the lenders.
– Documents validating your car insurance with the premium paid up to date.
– Your latest utility bill having your name and home address, or a mortgage statement, or rental agreement that can be submitted as proof of residence.
– Any proof substantiating your income.
– Personal references such as a friend or relative.
These are the basic documents and papers (that you already possess) that can be easily submitted for availing the car equity loan.
- – If my car is collateral for the title loans, what should I ensure to become eligible for the loans?
In the auto equity loan the resale value of the car is one of the deciding factors in determining the quantum of the loan.
– The car must be in good working condition, as no lender will lend on a car that fails basic driving standards.
– It must have a good mileage and performance and usability. If these factors are below par, the loan amount will be lowered accordingly.
– The car must be free of any lien or repossession notices or bank loans. If there is a small loan amount outstanding, lenders normally merge the extra cost into the loan amount. This is a wonderful opportunity to liquidate older loans and keep your credit record clean.
- – If I take title loans, and my car is collateral for the loan, do I lose access to my car till the loan is repaid?
No. In auto collateral loans the lender merely transfers your title in the name of his company for the duration of the loan, and on full repayment you get the title released back in your name. The important point is that you continue to have possession of the car and you can use it till the loan is repaid. The car gets attached by the company only if there is a default in loan repayment, and only after allowing you reasonable time to exhaust all avenues for repayment.
- – Assuming my car is in excellent condition, how much loan can I avail under title loans?
In fast car title loans the lenders normally limit the finance up to 50% of the commercial resale valuation of the vehicle. The valuation is usually ascertained from online sites like used price, and Macraes blue book or Kelley blue book USA. The year, the model, make and style and present running condition of the vehicle are the basic factors considered before fixing the resale value. So, if your car has a valuation of $20,000, you are theoretically eligible for loans up to $10,000. How much you actually get is linked to your income and your loan repaying capacity.
- – Isn’t the interest rate presently too high in title loans as compared to bank loans?
You must bear in mind that unlike long term lending by big banks secured by collateral of landed property and homes, the car based collateral loan is repayable within a shorter period of a month or so. Because of the higher risk and shorter repayment duration, the lenders steeply hike their interest rates. While a 30% rate can be considered as the industry average, there are unscrupulous lenders charging extremely high rates of 200% APR and above. Considering all issues, allowing exposure to a 30% interest outflow over a thirty day repayment slab makes more sense than taking loans from bigger banks that recover much more interest over a longer period. Once the short loan is repaid you become totally free of all liabilities.
What makes title loans so attractive is the ease and simplicity of the procedures. All you need to do is to follow a simple three step process that starts with filling up your online application giving the briefest of particulars to determine your eligibility, once that initial step is over you simply proceed and submit your papers to the lender’s nearest office. The wait for collecting the cash payment may be measured in minutes or a couple of hours, not more. It’s a system that is transparent, fast and efficient and millions of consumers have availed and paid off these collateral loans with ease and confidence. Do your research, locate the best companies, ensure to read the fine print, confirm that you are not paying usurious interest and always take care to repay promptly and on time, and you will be one happy client!