What are car title loans?
Car title loans are personal loans that pledge someone’s car title as collateral against the loan. Because the value of the vehicle exceeds the total amount of the loan, there are generally no credit requirements and in many cases a borrower’s credit is never reviewed. There are thousands of car title loan companies across the US. 800loanmart.com is one example of a car title loan company.
In order to get a car title loan, a borrower will be required to complete a loan application. The application will provide the title lender with a profile of the borrower as well as provide contact information. In addition, the borrower will be required to supply photo identification, copy of a recently received bill to prove residency and the names and numbers of friends or relatives who can be contacted in the event of a missed or late payment. Lastly, the borrower will need to present the lender with a clear title for the vehicle being pledged as collateral. After the application has been completed, the lender will conduct a thorough inspection of the vehicle in order to determine its fair market value. The value of the vehicle is used to determine how much the total value of the loan will be.
After the lender has assigned a value to the car, he or she will make an offer of a loan to the borrower. If the amount is acceptable, the loan transaction is completed and the lender assigns a lien against the title of the vehicle. This means that if the borrower defaults on the loan, the lender has the right to take possession of the vehicle and sell it in order to offset the balance of the loan. The lien remains on the title until the loan is paid in full.
Title loans are becoming an increasingly vital loan product for people looking to get anywhere from a few hundred to a few thousand dollars in under an hour. Since there are no credit requirements, borrowers do not need to have good credit in order to obtain a title loan nor does the loan get reported to the credit reporting agencies, even if a default occurs.