Now, is that time of year when a vast majority of people are looking to take a break from their busy and hectic lives and go on a vacation where they'll be able to not only relax and unwind but explore different cultures and places too.
There are lots of people who are yearning to take this step, however, unfortunately, they cannot afford to do so due to various expenses they deal with on a regular basis. But does it mean that they should give up on this endeavor?
Most definitely not. There are different options they can resort to if they want to finance their trip. One of the best solutions for these purposes is car title loans. If you haven’t utilized them so far and you’re not familiar with them enough, then just take a look at this guide because it is full of useful information.
Let’s Define It First!
If you want to consider applying for a car title loan in order to finance your next travel, then you need to know that you'll be obligated to put your vehicle as collateral. These sorts of loans are typically short-term loans that do not last more than one month.
In that period of time, you repay the lender the amount of money you borrowed, along with interest, or any other fees that may arise. As soon as you repay everything, you will get your vehicle back.
Even though many people put cars as a collateral, you can also utilize any other vehicle, like motorcycles, SUVs, or anything else. The amount of money you can borrow is normally up to fifty percent of your vehicle's value.
Furthermore, car title loans normally come with very high interest rates and fees. These are some rules that you need to always keep in mind before you decide to apply for a car title loan:
- You can borrow up to $1,000 for thirty days
- The lender will most likely charge you a finance fee of roughly twenty-five percent for thirty days, which means that it’s going to be an annual percentage of roughly three hundred percent
- Once those thirty days are over, you are obligated to pay $250, along with any other extra fees
What Are The Requirements?
Just like with any other type of loan, there are specific demands that need to be met. Now, you are probably wondering what are the most essential title loans requirements that are going to help you obtain this loan. There are certain documents that you must collect during the application process and they include the following:
- Original vehicle title that proves sole ownership
- Identification issues by the government that match the name on the title
- Utility bill that matches the name on the title
- Current car registration (or any other vehicle that you are planning on using as collateral)
- Evidence that showcases that your vehicle is insured
- Latest pay stubs
- Contact information (this includes name, address, and phone number) of at least two legit references
- Working copies of your car’s keys
What you need to remember is the fact that there are lenders that may demand a GPS tracking device to be embedded into the automobile, in case the borrower doesn't repay their debt. In these types of situations, the lender has every right to repossess your vehicle.
Some of these gadgets are designed to allow the lender to disable the vehicle from practically any location. Speaking of requirements, does it mean that you must have an excellent credit score if you want to apply for it?
Luckily, the answer is no. In fact, a vast majority of lenders do not pay attention to credit scores at all. How come? Well, that's because the loan mostly depends on the resale value of your vehicle.
Another great thing about it is the fact that you do not even need to be employed in order to apply for it.
What Needs To Be Known About Fees And Interest Rates?
When it comes to car title loans, most lenders have the tendency to charge roughly twenty-five percent of the entire loan amount each month in order to finance this loan. For instance, if you have a thirty-day vehicle title loan for one thousand dollars and the fee is twenty-five percent, you'll be obligated to pay $1,250 along with extra fees.
That’s something that you must do by the end of the month. It’s safe to say that car title loans have pretty high fees and rates, especially if you compare them with other types of loans. Consequently, if you decide to apply for them, then it would be advisable to first get your facts straight concerning the total cost of it, as well as, the APR.
Once you receive this information, you can compare it across various lenders so you can properly select the one that’s most convenient for you.
What Are The Benefits Of Car Title Loans?
Just like with any other type of loan, these sorts of loans come with various advantages and disadvantages, and today, this article is going to focus on the positive sides of it. For starters, since you need a certain sum of money to finance your vacation, you can definitely resort to them since you’ll be able to receive cash fast.
So how long does this whole process take? Once you apply for it, you need to wait for two hours to be approved for it. In most cases, you will receive money within one day through direct deposit.
As previously mentioned, practically no lender is ever going to look at your credit score, however, they are going to check the condition of your vehicle so they can properly determine a loan amount. Furthermore, they will take different factors into account when it comes to this to determine the amount of money you can borrow.
It’s not the end of the world if you are not capable of financing your vacation at this very moment, because, as you can see, there’s a way you can make it happen and it comes in the form of a car title loan.
