Easy Car Loans and Auto Financing

A car title loan is a new loan in the lending market. It has hit the scene with a splash. There are several people that have taken loans on the value of their cars. If this sounds like something you may consider, take the time to research this type of loan and know everything about it before you sign on the dotted line.

The first thing to know is that a car title loan should be used only for a short term loan. There is usually a thirty day time limit to pay the entire loan back. If you default in that time period, it is possible that the lender will take possession of the vehicle and sell it in order to get their money back.

Additionally, it’s important to know that the interest rate for this type of loan is typically pretty high. For a person that needs the money now and knows without a doubt that they’ll be able to pay it back, with interest, within those thirty days, this is a good option.

Next, it’s important to know the limits of borrowing ability your car will get you. By law, the lender will only be able to lend you the fair market value of your vehicle. If you’re driving a car that rolled off the assembly line in 1976 and it’s not considered a classic car, chances are you will not be able to get more than a couple hundred dollars, if that. However, if your car is newer and paid off, you will be able to borrow up to the amount of the resale value of the vehicle, which can be several thousand dollars. Yet, most title loans range from around $600 to around $2500.00.

If you are not able to pay the loan back within the thirty days that it’s been written for, the lender will typically roll over the amount loaned for another thirty days at the same agreed upon interest rate. This can happen up to six times; however, if you roll the loan over for six months be prepared to pay very high interest rates. Each month you are not able to pay the car title loan off turns into another month of interest charged. If you reach further than six months and are not able to pay the loan off or make satisfactory arrangements, you will be at risk of losing your car.

A car title loan can be a quick solution if you’re running into some financial difficulty. Often, you can receive the money the same day that you apply for the loan and the paperwork is fairly easy. However, this type of loan can be risky and it’s very important to work out a plan to pay off the loan before you sign for it. You are putting your car at risk if you cannot pay off the loan and we all are well aware of how dependent we are upon our cars. Borrow wisely and this type of loan can really come in handy in a time of need.