Top Five Benefits of Title Loans
Title loans provide a simple solution for people who need to raise cash in a short time. Whether there is an unexpected bill, or someone needs help getting through the month, these loans can help. Basically, a title loan is a loan where a vehicle serves as collateral. However, the borrower gets to keep the vehicle while he or she pays the loan back. Bank loans and payday loans can be either time-consuming or expensive; title loans offer an affordable solution to people who have a car with a clean title. Here are the top five benefits of title loans.
1. Process Is Quick and Simple
The best benefit of a title loan is that they are quick and easy. The process can be completed in less than an hour, and often the borrower can receive the money the same day. There is no lengthy approval process with numerous documents to process. This is incredibly convenient for borrowers who need the money right away for an unexpected expense.
2. Borrower Only Needs a Job and a Car
The borrower needs to have a job and a car with a clear title that is worth more than the amount of the loan. A credit score is a far less significant factor because this type of loan is a collateral loan, backed up by the value of the vehicle. It is quite uncomplicated; as soon as the loan is paid, the title is clear again, and the borrower can ask for another loan the next time it is necessary.
3. Borrower Can Continue to Use the Car
Another benefit to this type of loan is that the borrower can continue driving the car while the loan is being repaid. Life goes on as usual, and the borrower simply needs to follow the payment schedule until the loan is paid in full. This enables some borrowers to keep their cars instead of having to sell the car to raise the money.
4. Loan Terms and Payment Options Are Flexible
There are more options available for people who need a title loan than there are with other types of loans. If the borrower needs a small amount of cash to get through the month, he or she can borrow just that and pay it back at the end of the month. If the terms of the loan are more than a month, there will be a simple payment schedule. Most car title loan companies do not have prepayment penalties, so it is also possible to pay ahead or pay off the loan as soon as it is convenient to do so.
5. Loan Is Less Expensive Than a Cash Advance
Typically, a title loan is less expensive than a cash advance. Because the car serves as collateral, the loan company does not need to charge as high an interest rate. Interest rates are designed to protect lenders, and the car serves as this protection. This is a huge benefit to the borrower because the cost of the loan can be a lot lower.
Conclusion: Top Five Benefits of Title Loans
Emergencies happen, and having a plan to deal financially is essential. Getting a quick title loan is an option, but having a solid budget and setting aside money for a rainy day fund should be your first option. Learn excellent money management skills to avoid financial pitfalls. Most importantly, know your options when and if an emergency happens; title loans are an excellent option baring the lack of cash because of your collateral; you get a better interest rate and a speedy loan process.