What You Need To Know About Car Title Loans

What You Need To Know About Car Title Loans

June 3rd, 2020

If you were planning to get a cash loan in a hurry, it might be a difficult task if you have a bad credit history. Therefore, many car owners choose to apply for car title loans instead. This is suitable for those who need cash urgently and is widely used by more than 2 million Americans every year. However, car title loans may not be suitable for everyone. Below are some things that you should know if you want to obtain a car title loan in Florida.

What is a Car Title Loan?

It is essentially a short-term loan which dictates that your car is the collateral. Car title loans are easy to obtain because they do not require a bank account to process. In order to qualify for this type of loan, you need the title of the car and cannot loan the car to others for a certain period of time. Car title loans, however, can be expensive if you do not pay in installments. Typical single-payment car title loans require borrowers to make payment within 30 days. When you choose to pay using installments, you can spread the payments out over 24 months - which makes the loan cheaper to procure.

How Does It Work?

First, you need to apply for the car title loan online or at the lender's physical location. Your lender will then conduct an appraisal of the FMV (fair market value) of the car that you own, and give you a loan at typically half the value of the vehicle. Once your loan has been approved, you will receive cash and need to adhere to the loan repayment plan. The important thing to note is that if you are unable to repay the loan on time, the lender can choose to repossess the car.

Are Car Title Loans Safe?

Yes, car title loans are safe and allowed in approximately 27 states, including Wisconsin, Virginia, Utah, Texas, Tennessee, South Dakota, South Carolina, Rhode Island, New Mexico, New Hampshire, Montana, Nevada, Minnesota, Missouri, Louisiana, Kentucky, Idaho, Illinois, Florida, Georgia, Alabama, California, Delaware, and Arizona.

Auto title loans are different from traditional loans because there are no credit checks, no bank statement checks. Although this option presents slightly more risks, it is a good way to acquire fast cash. Don't worry; lenders can offer long-term repayment plans that last up to 24 months. In addition, borrowers can enjoy affordable monthly payment rates. If you have heard of lenders repossessing vehicles, it happened because they have run out of options to collect payments from the car title owner.

At Credex, we work closely with our clients to ensure that they have no issues with repaying. If customers have not fulfilled overdue payments, we will not repossess their cars immediately. Our loan experts will notify them and even adjust the auto title loan payment plan to make things easier for them.