There are many times when we are faced with an unexpected expense in our lives. Most of us will need to borrow the money to pay this expense. However, there are some of us who do not have perfect credit. We are often turned down for a loan. That is where it comes in handy to have a car title loan. These are loans that are much like traditional loans. However, these loans are not traditional in the sense that they run your credit report to become approved. These loans are based on the value of your vehicle. There are different approval methods for this type of loan.
What is a Title Loan?
A title loan is a loan you take out using the title of your vehicle. This means the vehicle cannot already have a loan out on it. There are some title loan facilities that will offer you a second chance. This is when you have a title loan out with one company, the second company will refinance that loan for you. When the second company refinances the first title loan they are essentially paying off the first loan. This might or might not give you a little more money from the second loan.
Are Title Loans Legal?
In most states title loans are legal, an example would be title loans florida. A title loan is sometimes called a title pawn. The only difference between a title loan facility and a pawn shop is that the title loan facility will allow you to continue driving your vehicle while you pay back the loan. If you pawn your vehicle at a pawn shop they are likely to keep the vehicle until you pay back the loan. This means that if you do not pay back the loan in time, the pawn shop will retain the vehicle an make it for sale.
What Happens if I do Not Pay Back my Title Loan?
If you do not pay your title loan, then the title loan company will retain the right to repossess the vehicle. This means they kept the title so they can have the right to repossess the vehicle in case you default on the loan. The title loan works much like if you were financing the vehicle for the first time. The lender usually retains the title so there is no argument about the lender getting the title from you at the time of repossession.
What are the Requirements for a Title Loan?
There are some requirements that are general for the industry. These requirements are you must be 18, you must own the title to your vehicle, the title must be in your name, the title must be from the state in which you are applying for the loan, and you must show them your vehicle before getting approved for the title loan. Sometimes, there are other rules depending on your state. But, generally, each title loan facility will have the above rules for you. Your loan amount will be based on the value of your vehicle.