Title Loan Guide
Getting a Loan Out of Your Car
Some may do not know that they can borrow money by using their cars as the collateral. Yes there is such a deal and it is known as pink loans. This is a loan where you as the borrower can use your vehicle to get the loan. It is an easy and fast financial loan. You, as the borrower, will surrender the hard copy title of your car to the lender, the one who will give you money. A lien will also be placed against your car. You will also make a copy of the key of the car and give it to the lender. When you have repaid your loan, the lender will return the key, the title will be given back to you, and the lien will be released. If you default payment of the loan, your car will be repossessed. This may sound simple but there are more details to learn about this type of loan.
The nature of a pink loan is that it is short term and has a higher interest rate than a common loan. Its APR could go up 36% and higher. The lender checks the condition and value of the car, and makes it as a deciding point on how much to give as loan. The lender does not bother checking your credit history but looks more at your property.
This type of title loan los angeles is considered a high risk for both sides the lender and the borrower, and being such, expect a higher interest rate for this negotiation. In most instances, several borrowers are in financial problems in the first place and may not be able to pay the loan. In this situation, the risk is higher on the part of the lender. It is for this high risk reason that traditional banks and credit unions are not normally offering this kind of loan to people.
Some lenders though still require and need to know the source of employment and income of the borrower before appraising the car. Also, some lenders would require that your car is fully paid when purchased and it should also be insured. The most that a lender puts value on the car is around 30% to 50%. This will give the lender a cushion if the borrower defaults on the payment of the loan, and will allow the lender some profit if the car will be sold. Negotiation takes only about 15 minutes to close, and the borrower can receive around $100 to $10,000 depending on the condition and value of the car. Know more about car title loans at https://money.cnn.com20120430autosauto-financing.
For this type of loan, repayment is due in full usually in 30 days. In cases when the borrower needs more time to repay, a new payment scheme can be computed. When the borrower fails to pay again, the lender may agree to rollover the loan but this time with a higher interest. This condition is not encouraged by the government to help the borrower not to be in an endless deep debt, and have the lender repossessed the car.
The car lenders can be contacted online or in your locality. There are a few requirements to obtain this loan, like government issued identification cards, proofs of residency, references and proof of car insurance, and proof of free and clear title under the name of the borrower. Good news, the vehicle is still available for the borrower to drive or use during the auto title loans period, and the funds will be transferred in the borrowers account within 24 hours.