Car Title Loans
Are you in need of cash and think you might need a car title loan? Read on to see and understand how car title loans really work.
Title loans are appealing because of their fast processing times meaning you can access money quickly. But you should think carefully before taking out a car title loan — can you afford a higher interest rate? This can make the loan more difficult to repay.
What is a Car Title Loan?
A car title loan is a loan that you secure with the title to your car. Typically, you receive a few hundred dollars and agree to pay it back in full—along with interest and fees—in two weeks to a month.
Car Title loans can be appealing particularly if you would prefer not have a credit check, the application process can take as little as 15 to 45 minutes, and you can continue to drive your car. But beware — they can mean trouble for borrowers.
How do Car Title Loans work?
When applying for one, the lender will assess the value of your car. They will then offer you a loan based on how much they think it’s worth. (Usually, you’ll get 25 to 50 percent of its assessed value.) A typical car title loan will be due in two weeks to a month, at which point you’ll have to pay back the loan—as well as interest and fees—in its entirety.
Are Car Title Loans legal?
Believe it or not, title loans are legal in the following states: Alabama, Arizona, California, Delaware, Florida, Georgia, Idaho, Illinois, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wisconsin.
However, because they’re so risky, a number of states have banned them.
Before you consider a title loan designed to trap you in debt or claim your car, consider borrowing money from friends or family, cutting back on unnecessary expenses, or taking out a legitimate personal installment loan.