Car Title Loan Basics
What is a car title loan?
A car title loan is a secure loan most often used by individuals with less than favorable credit history. A lender uses a borrower’s car title as collateral and when the amount owed is paid back, the title is returned to the borrower.
How much money can one borrow?
The amount an individual can borrow is dependent upon the value of their automobile. Many companies use a tool called the Kelley Blue Book. The KBB calculates a value of a car based upon several different factors such as year, make, model, and mileage. Usually, a lender will loan just a percentage of the true wholesale value of a vehicle. This is because they have to take into account the chances of a borrower not paying back the loan.
What are some other names for car title loans?
Car title loans are referred to differently in different areas across the country. For instance, a car title loan in California is sometimes referred to as a “pink slip loan” . In Georgia, many people refer to title loans as a “title pawn loan”. Other terms all referring to the same type of financial aid are “auto pawn“, “auto title loans“, and “car title collateral loan”.
Is a car title loan right for me?
A car title loan is a great source of immediate cash. It is very similar to a payday loan as far as convenience goes except with a title loan, an individual can typically obtain more cash. As previously stated, a title loan is also a nice option for people with less than favorable credit. In today’s economy, people need money. However, many people have poor credit which prevents them from getting a loan with banks and other financial institutions. A title loan company will lend to an individual when no one else will. To conclude, if you are in need of cash fast or have a troubled credit history, a car title loan may be a perfect financial solution for you.
