The Big List of Pros and Cons of Title Loans

The Big List of Pros and Cons of Title Loans

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Need some quick cash? TNL Car Title Loans is one of the surest ways to receive a quick influx of cash for short-term needs. But as the name suggests, a title loan means that the lender will require the title of your car as collateral. Car title loans have received a bit of a bad rep for this reason, but used wisely, a car title loan can really help you in your time of need. Just like any loan and financial product, car title loans should be carefully considered for its pros and cons.  As long as you know you can pay off the loan in time and on budget, these quick funds can help you get through a tough spot. But that requires knowing all you can about title loans—both the pros and cons of title loans. If you find that the loan is suitable for your situation, you’ll find that TNL Car Title Loans will be your best choice for a quick loan. That said, what are the pros and cons of a car title loan?


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Pro: Title Loans Are Great If You Have Bad Credit


Securing a loan when you have a bad credit score is tough. Lenders take one look at your credit history and scoff, telling you that they either can’t help you out—or want to charge you an exorbitant amount of money, so much so that the loan is no longer worth it. Title loans, on the other hand, do not base the loan on your credit score. For this reason, borrowers with bad credit can still get a car title loans if their vehicle qualifies for the loan. TNL Car Title Loans allow you to put your car up as collateral in order to receive a loan with bad credit.

If you’re trying to rebuild your financial situation—and are doing so without a credit history to fall back on—a title loan may be your only option in some cases.


Con: High APR


The other downside to taking out a title loan is the high annual percentage rate. Keep in mind that car title loans are meant to be a short-term financial solution and it is strongly advised to pay off the loan as quickly as possible to avoid high-interest payments. There are no prepayment penalties for paying off a car title loan early with TNL Car Title Loans. Borrowers: you should take note that although the quick influx of cash can do you a lot of good, if you are in a position where you don’t believe you can pay back the loan in time, the interest will add up and the risk of defaulting is high. This is a situation lenders want to help you avoid.

The good news is that being able to pay back the loan in time means that less interest will build up, keeping the loan itself manageable. Defaulting on the loan will cause you to lose the title you used as collateral—your car.






Pro: Quick cash


Although title loans can have a high APR, the relief provided by the quick cash of an auto title loan can be a life-saver for someone in an emergency. When you’re in need of an immediate cash resource, you can count on TNL Car Title Loans. Banks can take over a week to approve your application (and it’s not guaranteed), but TNL Car Title Loans can approve your loan in less than 15 minutes! Best of all, you can get a loan completely online with no store visits and no need for an appointment.  With all your paperwork and documents ready, you can get your cash as fast as the next business day, or even in some cases, on the same day you apply.


Con: The Risk of Repossession


Car title loans have a bad rep mainly because of the risk of losing your car if you end up defaulting on the loan. However, if you pay off your loan in time, you have nothing to worry about. Borrowers should know from the outset that the “title” in a “title loan” refers to the collateral you’re putting up. If you end up not paying off your loan to the lender and you’ll lose the title to your car since the title is now under the lender’s name. The car will be theirs, not yours.

Like the high-interest rate on the loan, this won’t be an issue if you’re confident that you can pay off the loan in time. If you have some cash flow coming in and can easily predict how much money you’ll have in the future, the risk of repossession is low. If you’re counting on another influx of cash, however, it gets a little risky.


Pro: It’s Not A Payday Loan


Payday loans are notoriously predatory and can even charge outrageous amounts of interest. If you don’t want to deal with payday loans at all, then the title loan can be a viable alternative.

Because you don’t have to have perfect credit to secure a loan of this type, you’ll find that the terms are a little stiff, but fair. That means you can have the quick influx of cash you need without worrying too much about the risks. And because it’s not a payday loan, you aren’t mortgaging your future paychecks simply because you needed that quick influx of cash.


Con: Some Companies Charge Bad Fees


You’ll want to watch out for fees on top of fees. Make sure that you work with a reputable lender like TNL Car Title Loans if you’re interested in a car title loan because some lenders will try to make sure you can’t pay the loan back by stacking fee after fee on top of their terms. Read the fine print from the outset and you’ll be able to spot these fees well in advance. Don’t get surprised by something you should have known was coming.


Pro: Title Loans Are Easy To Get


Unlike loans from the bank, car title loans are easier to get because the loan is not based on your credit score. If you’re the owner of a car and it’s paid off and lien-free, you may be eligible for a car title loan. The requirements for the loan are less stringent than if you were to apply for a loan with the bank. So even if you have some spots on your personal financial history, or you have poor credit, TNL Car Title Loans can still help you get the loan you need.




Car Title Loans With TNL Car Title Loans


With any loan, there is some risk involved. But if you work with the right lender, know your stuff beforehand, and have a reasonable expectation of future income, a loan can be a powerful tool for ensuring you have the cash you need now. It only takes a little foresight and common sense to make sure that a title loan works to the benefit of both parties. That’s why we felt it important to provide a list of pros and cons of title loans to better help borrowers understand how title loans work.

If you’re interested in a title loan for yourself, start by applying on our form online or simply call us at (888) 663-7074 to get the application process started today. It’s simple, convenient, and won’t require you to have perfect credit.

We hope our big list of pros and cons of title loans has helped you get a better grasp of how they work and if they’re right for you. If you need further assistance don’t hesitate to call us!



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