Online Auto Title Loans Frequently Asked Questions
You need quick cash, and you’ve heard about these things called online auto title loans. But you don’t quite know what to make of them yet. What’s the best way to learn?
By asking questions, of course. Fortunately, we encounter a lot of common questions from potential borrowers, so we’ve put together this quick list of FAQs to help you learn more about our auto title loans online.
Question: What is an online auto title loan and what distinguishes it from other loans?
Answer: When we say “online auto title loan,” really, we’re referring to finding an auto title loan online. It’s still an auto title loan in the strictest sense of the phrase.
As to the title loan itself, the concept is simple: you take out a loan against the title of your automobile. This means that if you default on the payment of your loan, the title of your car will be taken as collateral. It’s risky for anyone who doesn’t know if they can pay off the loan, but it can be one of the best ways to acquire quick cash for those with damaged credit.
Question: I have bad credit. Can I get a title loan?
Answer: These loans are specifically for people with bad credit. If you have damaged credit from a history of late or missing payments on your record, it can be difficult to acquire loans like mortgages and even short term loans without jumping through a lot of hoops.
But by putting up the value of your car against this loan, you offer the lender some additional security for making the loan. The interest rates will still be high, but as long as you have the capacity to pay off the loan, you’ll be able to get back on track.
Question: I have low income. What about me?
Answer: Because low income is often a risk or limitation for lenders, acquiring a loan with low income isn’t easy. Using a title loan is a great way to get more cash than you usually could. You won’t be exempted simply because you have low income. But you should examine your ability to pay off the loan in full.
Question: Why would someone apply for online auto title loans?
Answer: There are a variety of reasons. Usually, the person acquiring the loan is in need of some quick cash. Maybe they have an emergency medical payment to make or simply need some money to float them while they’re starting up a new job. Like most loans, the reasons for acquiring them vary.
Because an auto title loan requires your car’s title as collateral, the stakes can seem pretty steep. But usually those taking out a title loan have bad credit and need to put up some sort of stakes to make the loan more viable for the lender. If you can pay off this loan on time, it can be a quick way to keep some cash in your pocket.
Question: What’s required for a title loan to take place?
Answer: One of the most important facets of a title loan is that the person borrowing the money must own the car that’s used as collateral. Otherwise, the lender would not be able to claim it as collateral.
The good news is that you don’t need great credit in order to secure a loan of this type. Your basic information will be required, as it would for any loan. You’ll bring in the title to the lender at the onset of the loan and will be able to redeem it when the loan has been paid off. Default on the loan, however, and the lender can come for the ownership of the car itself. Think of it as essentially borrowing money against the value of your car title.
Question: Can my car get repossessed if I don’t pay?
Answer: That is the central risk of the auto title loan. Although you don’t need great credit or even a significant income to take out a loan of this type, putting up your title as collateral will expose your car to this risk. That’s why it’s important that you know whether or not you can pay off this loan in advance of actually taking it on.
Question: Is this a payday loan?
Answer: No. Payday loans are essentially “advance” loans against your future paycheck. With online auto title loans, you don’t have to put up any of your future earned income in order to secure the loan for yourself.
Because many payday lenders are predatory in nature and charge very high interest rates, you might think of the title loan as an alternative when you’re in need of quick cash without possessing great credit. And you’ll continue to take full possession of your paychecks even after you have an auto title loan. This helps you make your own budget and set a schedule that allows you to pay off this short-term debt.
Question: Should I really try to apply for online auto title loans?
Answer: Going online is a great way to compare lenders and ensure that you’re working with a lender with a credible reputation. Make sure that the lender you work with has an established web presence as well as a reputation as a fair lender. This will help you be certain that the agreement will be fair.
How can you avoid “bad” lenders? Try to do a little research online and find out more about lenders before you fully commit to them. A lender that does not have an established web presence or reputation might need to be avoided. You are trusting the lender with your car title. You want to make sure they’re trustworthy.
Question: What kind of interest rates can I expect to pay?
Answer: Because online auto title loans are short-term loans, you’ll generally pay a fairly substantial interest rate. This helps keep the lending profitable for the lender, especially when working with people of low income or bad credit.
This shouldn’t scare you off from an auto title loan, however. If you make your payments on time, you won’t have to deal with the cumulative effect of high interest rates. That’s why it’s important to both work with a credible lender and create your own plan for paying off the loan on time.
If you’re interested in learning more about online auto title loans, keep browsing our site to learn about The Net Lender and what we do. Or simply give us a ring at (888) 663-7074. We’ll help you understand the process, answer your frequently asked questions, and guide you through what it takes to secure one of our online auto title loans.