Are you looking for some extra cash but are unable to qualify for a bank loan? If so, why not consider taking out a vehicle title loan? In this type of loan, you will be offering your car or truck's title as a form of collateral. For many people, this is a great way to get the money they need. However, before you decide to go this route, you need to know the pros and cons of taking out these kinds of loans.
There are many pros to taking out a vehicle title loan, and some of the best ones are as follows:
1 .Easy Qualifying Process - One of the best benefits of title loans is that they are much easier to get than bank loans. Since you are offering your vehicle's title as collateral, you can qualify for a loan even if you have less than desirable credit. So long as you have a job and a decent car or truck, your title loan request will typically be approved.
2. Fast Approvals - Another great benefit you can enjoy if you choose to apply for a vehicle title loan is that approvals are amazingly fast. In most cases, you will simply need to sign some paperwork, agree to the loan's terms, and you can receive your money within just a few hours or less.
3. No Need to Give Up Your Car - Finally, if you are approved for a title loan, there is no need for you to give up your vehicle. You can keep your car or truck and continue to drive it wherever you need to go. You may need to purchase additional insurance for the vehicle; however, the costs for the coverage will most likely be included in your loan.
Now that you know the pros of vehicle title loans, you should know the cons as well. The most common disadvantages associated with these loans are as follows:
1. Ridiculously High Interest Rates - One of the worst features of vehicle title loans is that they often carry ridiculously high interest rates. In fact, in some cases, they have been known to have rates higher than 100 percent. Furthermore, if you are so much as one day late with your payments, late fees will be added to your balance. This can make it difficult to impossible to pay the loan off.
2. You Run the Risk of Losing Your Vehicle - The absolute worst disadvantage of title loans is that if you become default in your loan, your car or truck can be seized by the loan company. To make matters worse, if the sale of your vehicle does not cover the balance of your loan, the loan company can sue you for the difference.
If you are in need of money, you may want to consider applying for a vehicle title loan. However, before you apply for one of these loans, you will want to examine the pros and cons described above. If you feel sure that you can pay your loan off in a timely manner, this may be the loan for you.