What You Should Know About a Car Title Loan

A Car Title Loan  (also known as a Fast Auto Loan) is a short-term secured loan that uses your vehicle’s title as collateral. Car Title loans can be an option for borrowers with poor credit who are in need of emergency cash. However, there are a few things to keep in mind when considering this type of loan.

The amount of money you can borrow depends on the value of your vehicle, which is typically determined by an appraisal. Aside from your vehicle’s value, the lender will also take into consideration your income and ability to pay. In general, the maximum loan amount is between 25% and 50% of your vehicle’s value.

Debunking Myths: Separating Fact from Fiction About Car Title Loans

Often, the lender will require you to provide your vehicle’s title, proof of insurance, a photo ID and a form of income. Depending on your state, the lender may need to hold your car keys until you repay the loan. Repayment terms vary by lender, but many offer both single-payment and installment options.

If you are unable to repay the loan by the end of the term, the lender has the right to repossess your vehicle. You should only consider a Car Title Loan if it is an absolute necessity. If you are in need of emergency funds, it is better to seek out alternative financing such as a credit card for people with bad credit or a payday advance. Car Title loans are known for their high interest rates and fees, so you should carefully weigh the pros and cons of this option before taking out one.