Many types of loans are available today for people who need to borrow money. One type that is growing quickly in popularity is the title loan. This is a loan where the car is used as security. Here are five reasons car title loans are popular today.
No Credit Checks Necessary
You often need to have good credit in order to borrow money through traditional channels like a bank. This is a problem for people who need money to pay down debts or deal with emergencies. The very thing hurting your credit is what you need the money to resolve. Car title loans are popular because no credit check is necessary. The loan is secured by the vehicle of the borrower. There is no reason to worry about the credit of the borrower since collateral in place. With over 253 million cars around the country, this makes title loans very accessible to average people.
A conventional bank usually has a long and drawn out process for approving a loan. Several people will have to meet to determine whether an applicant is worthy of borrowing money. This can take weeks or longer. Title loans skip that process. You could be approved for a title loan in just a couple of hours or a day. The process is streamlined since you are presenting collateral. Fast approval means that you can get one of these loans at the last minute in order to deal with a sudden emergency.
You Can Borrow Large Amounts
Some types of consumer loans limit you to borrowing small amounts of money that do not always help. Title loans allow you to borrow much larger amounts. The amount you can borrow is frequently based on the value of your vehicle. Your income, borrowing history or other assets do not matter. The only thing the lender looks at is the value of your vehicle and any limits set by the law. The ability to borrow a large amount of money means you can solve major financial problems fast to prevent things like evictions and repossessions.
Flexible Repayment Schedules
A problem with short-term lending that many people encounter is becoming unable to repay a loan within just a week or two. This is partly why around 35 percent of Americans have debt in collections right now. This is not much of an issue with car title loans. You can set up a flexible repayment schedule. You can pay the loan back over weeks or months. This prevents you from getting into more financial trouble later.
Simple Application Process
A final reason for the popularity of title loans is that the application process is simple. You do not need to spell out everything you own, every bank account and every person you know. There are not pages of forms to fill out. Most applications for these types of loans are short and to the point. You just need to present the right documents like a title, identification and proof of residency. You can normally fill out a title loan application in minutes. This lets you borrow money without having to miss work or other responsibilities.