An auto title loan is a very popular form of loan for those who may not have the option to borrow from conventional lenders such as a credit union or bank. Lenders providing these types of short-term loans can be found in storefront locations as well as online.
Applying for auto title loans, which is also known as car title loan is simple and easy. An applicant can apply online with a little amount of information which include the applicant’s employment status, monthly income amount and contact information. It’s compulsory, in most cases, for the borrower to have a checking account with direct deposit of their paycheck as that is how the lender will get loan payments from the borrower.
Loan amounts range from $100-$5,000 and it depends on the value of the vehicle and the state the borrower lives. The borrower is obligated to hand over the car title or pink slip of the car as collateral for the loan. If the borrower is unable to repay the loan, the lender has the right to repossess the vehicle and sell it.
One of the most amazing aspects of an auto title loan online, apart from the comfort and amount in which they are given, is that an applicant’s credit rating is not part of the loan process. The lender won’t run your credit history when determining whether or not to approve you for a loan. This is the reason why people with bad or no credit find these types of loans so attractive.
Since the credit history is not considered when applying, it’s also not part of the repayment process. Generally, when you take out credit in the form of a mortgage, credit card or auto loan, your payment history goes on a folder with the 3 credit bureaus. How responsible you’re with repaying your loan will determine your credit score. If you’re late in paying your auto title loans, your credit score will be affected negatively and you may be considered high-risk for future borrowing. When you pay on time, your credit rating will be improved and you’re seen as being creditworthy. The higher your credit score, the more purchasing power you get.
Some people deliberately take out a personal or credit card loan for the sake of building their credit score or creating one if they have never had credit before. Keeping a small balance with payments that credibly fit one’s budget is the best way to carry credit. Taking a car title loan to build your credit is not useless. Although, car title loan lenders do not report to credit bureaus, but can put you in a good financial position since they will provide the cash you need immediately.
An auto title loan is a secure form of credit. It only involves using your car title as collateral. You can search on the internet and get reputable a car title loan company that can help you with quick cash.