The Advantages and Disadvantages of an Auto Title Loan
An auto title loan is an option that someone can take in order to help them in a time of need. However, as with any decision that you make in life, it is always best to weigh the pros and cons before committing to anything. This next article is going to go over how an auto title loan can work to your advantage, as well as the disadvantages that could possibly go along with an auto title loan.
The Advantages of an Auto Title Loan:
Fast Funding –
One of the most attractive parts of an auto title loan, is the fact that an auto title loan is much quicker than most other loan products out there. Most consumers will go from application to funding within the same day; as long as their required documentation is in order. If fast funding is what you need, then an auto title loan is an option that works in your favor.
*See below for reasons why a customer may need fast funding
Reasons why you may need your funds quickly:
- Pay your rent
- Medical Emergencies
- Pay your electricity or water bill
- Pay for your college text books
- Help a friend in need
Possibly Help Your Credit:
Some lenders actually report to the credit bureau. Since this is the case, once you pay your loan in full, this would be reported as a “paid auto” on your record. This is one way that it could help your credit. The other part that would help would be how you took care of your monthly payments during the duration of the loan. If you made your payments in a timely manner, this would also help your credit.
If you are the owner of a vehicle, motorcycle, or in some cases; an RV, you can apply for an auto title loan. An auto title loan is a product that is not as strict when it comes to basing your approval on your credit score. Since you are securing the loan with the title to your vehicle, an auto title loan is a much easier option to be approved for than most unsecured options. MaxCash title loans is dedicated to matching you with the easiest approval option in the auto title loan industry.
If you are in a bind, and you have issues with your credit history, then contact MaxCash title loans today in order to get yourself the funds you need as quickly and efficiently as possible.
You Get to Drive your Car While You Have the Loan Out:
One of the main parts of an auto title loan that attract many consumers, is the fact that you get to keep your vehicle while you have the loan out. The only thing that stays with the lender is the physical title itself. Many people get themselves into such a difficult situation that they don’t know what to do. One thing that they consider is to sell something that would hold enough equity that it would get them out of their current situation even though they have worked very hard in obtaining the item that they are considering selling. However, with an auto title loan, you can have the opportunity to get yourself out of a stressful situation without having to sell your belongings.
Possible Disadvantages of an Auto Title Loan:
Term Length –
Some lenders have a much shorter term length than many other personal loan options. There are some lenders that will only give you between thirty days to six months to pay the loan back in full. However, we here at MaxCash can match you with someone who can have an extended amount of time to pay off the loan. A lot of people that we work with, will give you somewhere between twelve to forty eight months to pay the loan off.
High Interest Rates:
The one main issue with an auto title loan that can be viewed as a “disadvantage”, is the interest rates. Auto title loans are “high interest” loans. Since most lenders are willing to take a chance on a customer who has not had any luck with a bank, or another financial institution that require a consumer to have a solid credit history, these loans tend to have higher interest rates. However, most of these auto title loan lenders offer NO PREPAYMENT PENALTY FEES. If this is an option, then you can at some level control your payback.
For example, if you sign a contract for a twenty four month term at an interest rate of a hundred and eight percent interest rate, then your monthly rate would break down to nine percent monthly. Since there would be no prepayment penalty on the loan, you can pay back whenever you would like. If you wanted to pay back that loan in three months, you could do that and only pay nine percent on each of those three months as opposed to the full hundred and eight percent on the contract.