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Understanding the Concept of Title Loans

| January 09, 2018, 05:20 PM

Are you in need of a loan urgently? Banks are usually the first option when you need a loan, but they require extensive paperwork. This may not turn out to be an ideal choice when time is a critical factor. A car title loan may be the best choice in this situation.

What is a Car Title Loan

Well, if you are wondering what car title loans are, then here is the answer. Car title loans can be termed as instant loans. You can easily get these loans when you pledge the title of your vehicle against your loan amount.

What makes the car title loans such a great option is that it takes very little time to process and you will not need to deal with a lot of paperwork.

However, there is one thing you need to keep in mind when applying for a car title loan–the high interest rate. The reason behind the high-interest rate is to reduce the lender’s risk.

Things You Need to Know About Car Title Loans

You need to have a clear title

You need to have a clear title, and it is also important that you should be the title holder of your vehicle.

A good condition car means higher loan value

The borrower can borrow the amount against the value of his vehicle. Ideally, you should borrow an amount that is equivalent to the resale value of your vehicle.

This means that if you own a vehicle that is in good condition, then you get a larger loan amount.

Repayment periods are short for the title loans

When you use a car title loan, keep one thing in mind. The repayment period is quite short for title loans. For example, you need to pay the loan in 15 to 30 days. This is why it is critical to assess your financial situation prior to seeking this type of loan.

If you fail to pay back the loan in time, then the title loan may rollover to a higher interest rate. For example, if you fail to pay back the loan within the specified period, it will be carried forward to a future date at a greater interest rate.

Every time the date gets carried forward, the interest rate will spike up. If you feel that you will be unable to make the payment on time, it is imperative that you get in touch with your lender. There might be a possibility to negotiate in this situation.

The DC title loans are more apropos for emergencies provided you seek the loan from a reliable lender. Conduct detailed research before striking a deal with your lender and be sure to ask all your questions and have your concerns answered because this can save you from trouble down the road.

Severn Bank

Category: Local News, NEWS

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