Title loans and title pawns are essentially the same things. 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 gets 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.
Top 5 Easiest States to Get a Title Loan
Getting a title loan isn’t tough – but these five states make it a super simple process!
A title loan is an effective financial tool because it allows you to unlock the equity in your vehicle to help you solve your financial issues.
By pledging the title to your vehicle, we’re typically able to lend you the money you need – at terms that will help you achieve your financial goals! Like any loan on the market today, title loans are regulated by state and federal regulatory agencies.
This means that there are rules that must be followed by the lender, as well as by the borrower before a title loan can be funded. Some states make it easier than others to get a title loan, so let’s take a look at where it is easiest to get one! The top five easiest states are:
Our most populous state allows for minimal restrictions when it comes to automotive title loans. Lenders must limit interest rates on loans up to $2,500 (nothing wrong with that from a consumer perspective!) and that’s about it! A simple application, a qualifying vehicle, and an ability to repay the loan are about all you need to secure a vehicle title loan in California.
The Sunshine State allows vehicle title lending and caps interest rates at fairly low levels. This allows the borrower to enjoy low payments and all of the benefits that a vehicle title loan offers – like quick access to cash, minimal credit scores requirements, and the ability to continue to drive their vehicle.
The Lone Star State should be called the “Loan Star” state due to easy access to title loans and title pawns. Lenders in Texas are generally formed as Credit Service Organizations, which allows for a quick and streamlined loan process.
Title loans in Ohio are easy to access, typically require no credit check, and can be had in a range of amounts. Our vehicle title loans range from $500 – $15,000 and can provide cash to you in less than a day! With no credit check, a quick and simple application, and high approval rates, you’ll be able to address your financial needs in no time!
The Grand Canyon state is one of the least intrusive of all when it comes to acquiring a title loan. There are no limits on loan sizes, no minimums or maximums on interest rates, and minimal regulations concerning automotive title loans. If you are a borrower in Arizona, a loan through a licensed loan provider may just be your answer!
Don’t Fall Prey to Title Loans – Instead, Seek Alternatives to This Menace
Loans are taken for a purpose but often banks don’t approve them just on the basis of documents. There are some risky loans like title loans where you pledge some substance you have as collateral, in most cases being a car.
Although it sounds convenient, one should go through the nitty-gritty and enquire about alternatives before opting for a title loan as he is a big risk of losing the car if there is a default on a single payment. Since they have risks as well as extra expenses, one should consider various options before taking a title loan.
Termed as “last chance” lenders, people only approach them for extremely important cash needs as they are considered predatory lending agencies. The interest rates may sound reasonable on paper but people do not realize that the quoted interest would just be for a month.
Title loans or Cost cutting
The simplest and foremost thing to do when there is a paucity of cash is to reduce the cash flow every month. This can be done by living frugally in order to avoid title loans. One can also consider modifying the loan on the mortgage. You may also seek the assistance from counselors who can guide you through the complete process and offer sane advice. Since the number of unlawful elements is more than the genuine credit counselors, it is highly advisable to find out more details.
Loans other than Title Loans
It is best to check if it is possible for you to get any other kind of loan. You can request your friends or family for a loan or even help you by co-signing the loan. It is imperative for you to remember that the lender’s money, as well as credit, is at risk, hence, you must only exercise this option if you are confident enough to repay the loans.
Some unsecured loans which are not title loans can also be explored. A reasonable income and good credit may help you in getting an unsecured loan from a local credit union. You can also try to check loans available on your credit card which are sometimes offered at a rate of interest than the title loans.
You can also try peer-to-peer lending sites. The services permit you to opt for alternative options like borrowing from individuals. Not only are the interest rates more than the bank loan rates but they are also unsecured loans. In any way, you are better off without a title loan.
You can try to sell some unwanted stuff at your place on websites like eBay or Craig’s List which pay money for used items. This is a simple but effective way to raise money.
It is best to do your due diligence before taking a title loan and that is why it is you should understand the terms and conditions in the title loan documents before signing on the dotted line. Many people have experienced situations when there was a scarcity of money during contingencies. Even though exorbitantly high interest rates and fees are tough to pay, one can always seek help from title loan companies in times of help.
This is a guest post by John Mayer. He is a well-known financial consultant working round the clock to provide assistance in every way possible to help people dealing with bad credit scores. He is also working with a UK payday loan company, thus providing instant cash loan service.