If you're in a situation where you are short on cash, you may need to look into a loan. However, with there being several types of loans available to you, selecting the right kind can be a difficult process. If your car has been completely paid off, consider getting an automobile title loan. Here is what you need to know about them to determine if they are best for you.
All Income Levels Qualify
One problem with personal loans from a bank is that they look closely at your income levels and credit score, typically because the loans do not require collateral. This makes it hard for the average person to get a loan that has poor credit and does not make much money. By using an automobile title loan, your vehicle is the collateral. This helps anybody qualify for the loan if they have a paid off vehicle, no matter what their credit score or income level is.
The Loan Is Processed Quickly
When applying for a vehicle title loan, know that the approval process happens quickly. A typical loan from a bank will require days of waiting for the loan to be approved by underwriters that analyze all of your financial data. One benefit of vehicle title loans is that the approval happens very quickly.
The main thing that takes time is determining the current value of your vehicle, which will dictate how much money you can borrow. You won't be given a loan that's worth more than what the car is worth, which is why the lender does their research.
Automobile title loans also do not require a credit check. Since the car is used as collateral, the car is what is taken back if the loan is not paid back.
The Money You Borrow Doesn't Have Restrictions
A traditional loan from a bank is typically for a specific purpose, which is what the money has to be used on. Vehicle title loans can be used for anything. If you wanted to use it to pay for a vacation, medical bills, or home renovations, you could do that with the money you receive. The lender will not care what the money is used for since all they care about is having the collateral of the car in case you miss payments.
For more information on automobile title loans, speak to a local lender that can walk you through the process.