Car title loans have continued to gain popularity among users for a number of reasons. One of the most common reasons is the ability of the loans to offer quick cash during an emergency because you don’t need to fulfill many requirements. Unlike bank loans, a car equity loan does not need a co-signer, perfect credit history, and in many cases, you don’t require expensive collateral as your car is the only security considered in this case. There are many benefits you can draw from getting a car title loan. Here are several that can impact your financial situation.
Get Money Fast, Good for Business Capital
Often, when you need to buy items for your business, you cannot afford to wait for days as customers don’t understand your limitations. When you need cash quickly, a car title loan is a reliable fallback solution that guarantees you access to capital or money to use in other emergencies. The lender processes the application quickly, and you can get the money in less than a day. This is usually because of the short appraisal period as the lender only examines your car to confirm its worth and determine whether it can fetch the amount you are looking to borrow.
Lower Interest Rates
When you borrow from a bank, many things are considered, including your credit history. A bad credit history is a red flag and will often lead to more interest charged because you are classified as a high risk borrower. However, if you don’t want to dig deeper into your pocket, you should opt for a car title loan because the interest issued is usually lower. Interest is based on your vehicle and job, and many lenders don’t place penalties against the loan when you decide to pay early. The monthly payments are affordable, and you can get a longer payment duration.
You Still Use your Car
Even after applying for a car title loan, you will still continue using your car. If you were using your car to carry business supplies, or for any other business purpose, you will not lose this utility. Although the car is used as security for the loan, you only hand the title, which is returned after you have paid the loan in full. So there is no need to worry about incurring an extra cost for renting a car to get around.
Cheaper than Cash Advances
Compared to cash advances, car title loans are cheaper. Since your car title is held as the collateral, the lender does not need to charge extra interest to shield themselves against losses. Cheaper borrowing means you can much easily manage your debts and it makes repayment stress-free.
To deal with your financial problems, you could borrow money either for an emergency or to finance a project. If you want money without going through a stressful application process, you should opt for a car title loan. The loan approval period is shorter, and it comes with a lower interest compared to other lending options like bank loans. You also get to keep your car despite using it as collateral.