Car title payday loans

Looking for instant cash? Think about payday car title loans. Payday car title loans are not that different from other secured loans, but you are required to use your car as collateral for the money to be borrowed. Although you get faster and hassle-free cash, you should know some facts about Car Title Payday Loans before you go for it.

Prerequisites for Car Title Payday Loans

Like all other secured loans, payday car title loans too have some prerequisites to be satisfied. To be eligible for these loans, you should not have any outstanding balance due on your car. You should also be the unambiguous owner of the car and have a comprehensive proof in support of the ownership.

Advantages of Car Title Payday Loans

Although there are many risks in this loan, it also has its share of advantages. For example, even borrowers with poor credit record can benefit from this loan, as there is no credit check and the income verification is also minimal. Payday car title loans are approved instantly, in a matter of a few hours, and the application process is simple as well.

Disadvantages

Many think that there is an elevated risk in going for car title payday loans. The reason is, the interest rates are higher and also the lender gets the authority to seize your car if you don’t do the payment on time. The lender gets a spare set of your car keys to help easy confiscation. Also the lending company gets complete authority to sell off the car and take all the money, even if the value of the car is much higher than the actual sum borrowed. Moreover, you can borrow only around 50% of your car’s value, which is too low when compared to other secured loans. Time and again borrowers become unable to payback the loans, resulting in higher interest rates. Ultimately they end spending much higher than what they actually borrowed, to try and save the car from confiscation.

High Interest rates and Loads of Fees

Besides the mentioned disadvantages, you also have the issue of having to pay many fees like: document fees, processing fees, late fees, lien fees, origination fees, and of course you have the higher interest rates as well to consider.

Considering the numerous drawbacks in car title payday loans, it is better to go for an alternative loan where you can use the same car as collateral but with terms that don’t allow the lender to sell your car. So you will at least have a chance to redeem it later. But if you are in an emergency financial situation and there is no other alternative to get quick cash, then you can try payday loans on your car title. However, you should prepare in advance to pay off the loan promptly, or you may have to lose your dear car.

Continue to: How Do Car Loans Work?