Title loans are very simple to understand, you are putting the title of your vehicle up for collateral. This is known as a secured loan. Secured loans cater to people with bad credit. Since it is a high risk loan if the borrower defaults the lender can repossess the vehicle. People with good credit can generally get unsecured loans, meaning the don’t have to put up any collateral. The borrower must produce a clear title on the vehicle free and clear of any liens. The borrower must own the vehicle outright.
The lender will then put a lien on the vehicle making the lender the legal owner of the vehicle until the loan in paid off. The borrower continues to be the registered owner. This process is similar to financing a car.
With a car title loan you can continue to drive your car while you are paying off the loan. This increases buyer confidence that the loan will be paid off because they will be able to continue to use their vehicle for work and to run errands.
Title loans usually occur when the borrower is in need of some immediate cash but not in all circumstances. Unexpected occurrences can happen and not a lot of people have money saved up for emergencies It’s emergency money for things like immediate surgery or home repairs
. It’s also a quick process, and you can easily get cash in your hand that same day if you meet the requirements.
You can get a title loans online with anything not just a car. RV’s, Dune Buggy’s, Jet Ski’s, Boats, etc. Title loans have become more popular than ever with the bad economy. People have to give up their possessions as collateral because they have no other choice. One of the benefits of a title loan is that you can continue to use the vehicle unlike a pawn where the collateral is stored on the lender’s premise.