Title loans and title pawns are essentially the same thing. Some states refer to loans that are secured by a vehicle title as a “title loan” – while others states utilize the phrase “title pawn.” It is important to understand that these two loans are essentially identical other than in name, and provide similar benefits to the borrower.
Title loans are generally considered a responsible and effective means of borrowing cash on a short to medium term basis. That said, it is important to understand the fundamental characteristics of a title loan or title pawn.
How Does One Apply For and Secure a Title Loan or Title Pawn?
Title loans usually offer a simple application process and quick underwriting turnaround. First – a borrower should apply online through a reputable site. Information such as name, social security number, date of birth, and ID information will typically be collected. This information is necessary to build a basic application profile.
Then, details about the vehicle will be gathered. Year, make, model, mileage, and general vehicle condition are factored into the online application. Once the application is complete, a title loan lender will typically reach out to the borrower to schedule an in-person vehicle inspection.
This serves to verify the actual vehicle data, as well as determining the exact condition of the car. Since the vehicle is being used as the collateral for the title loan or title pawn, it is important that the lender knows how much the car is worth. This ensures that the borrower receives the maximum loan amount based on the vehicle’s fair market value.
Once the inspection is complete, the borrower will typically receive cash within a few hours to a couple of days. This cash can be used for anything the borrower needs, and is usually offered at an interest rate that is more attractive than what a payday lender or cash advance establishment offers. In fact, title loans and title pawns are generally considered one of the safest and smartest ways to access short to medium term cash.
Title Loans Allow the Borrower To Keep Driving His or Her Car!
A vehicle provides a way to get to school, drive to and from work, and take care of the important things in life. In most locations across the county, it is almost impossible to live without a car – so selling a car to raise needed cash makes little sense.
A vehicle title loan or title pawn allows the borrower to receive cash against the value of the vehicle, while continuing to drive it as normal. So whether unpaid bills, medical issues, or personal debts are driving the need for cash, a title loan or title pawn can quickly and effectively manage these short to medium term financial issues. No matter the name, a title loan or title pawn is a powerful financial tool that can help just about any borrower get back on track.
Help To Understand Such Loan
If you’re still wondering how a title loan works, this nifty infogram might clear things up for you. You can always give us a call, our agents can walk you through the process, step-by-step.