Like everyone else, you may have been in situations when you need extra cash fast. And like many other people in the same predicament, you may have considered getting a payday or installment loan. Depending on your specific needs, there is another way to have access to quick cash if you have a car and a steady income. It is called a title loan.
In many states, including Utah, title loans involve using the title of your vehicle as collateral in exchange for quick cash. Here are the benefits of title loans to help you decide if it’s for you:
Quick Access to Cash
You may be able to have the funds you need in a couple of days after application, even within the day in some cases. The loan should be ready once the paperwork is signed, photos of the vehicle are taken by the lender’s representative, and the title is submitted.
No Credit Check Required
Traditional bank loans require a stringent credit check to make sure the borrower is creditworthy. This is not required when applying for a title loan. You can get a loan even if you do not have a sterling credit score.
You Continue to Use Your Car
The lender holds the vehicle title once your loan is approved, but you may continue using your car. The title is simply held as collateral and will be returned to you once the loan is fully repaid.
Lower Interest than Payday Loans
Because it is secured by your car, a title loan bears a lower interest rate than a payday loan. It is cheaper because the collateral offers a high level of security for the lender.
Quick Repayment Schedules
Once the loan is approved, you will immediately know when and how much money you need to pay. Depending on the principal, repayment may be in several monthly installments. The value of your car will determine the maximum amount you may be able to borrow.
While a title loan may be easier to pay than an unsecured loan, bear in mind that you risk losing your car in case you default on your payments. As such, make sure you have the means to pay the loan before applying.