A title loan, also called a car title loan, is a kind of secured loan in which borrowers are able to use their car title as security. Borrowers who receive title loans have to allow a bank to put a temporary lien on their title, and in return for a loan sum, relinquish the car title. The advantage of this loan is that borrowers do not have to have a good credit rating, they need to be able to demonstrate that they have sufficient means to pay off the debt. If you fall into this category then you may want to think twice before applying for another such loan, even if it is offered at a lower interest rate than what you would usually pay. Click here to read more about title loan.
Most title loans work like this because the bank has to assume that the borrower has sufficient means to pay off the debt. Therefore, when the application process is being carried out, the lenders have to look past your credit score and ability to make repayments to secure the loan amount in case you cannot meet the deadlines for the repayments. It is important that borrowers understand that this application process may affect their ability to access loans in the future because of the negative impact on the credit record. In fact, some lenders even consider such applications as a kind of breach of contract that could lead to legal action being taken against the borrower.
Because title loans are secured loans, the borrowers are required to provide collateral in order to secure the loan amount. This is normally done by providing a vehicle title or a land or house property which could be used as security. In fact, some lenders will even offer a discount in the interest rates if the property or vehicle is pledged as a form of collateral, thereby reducing the interest rate to a more affordable rate. The best Georgia Title Loans Lawrenceville leaders offers affordable title loan rate
However, it is important to note that the amount that the borrower is eligible to borrow using title loans is based on the equity that is present in the collateral. If there is no equity, the minimum amount that is required to be offered as a security will be the entire market value of the property or vehicle being offered as a form of collateral. Therefore, applicants who do not own any property or vehicle can also apply for such loans and should their applications qualify them for the same. Those homeowners who own small boats and cars would do well to look into this type of home equity loan, provided that their financial circumstances fit the criteria.
There are some limitations that apply to borrowers applying for title loans in order to cover other financial obligations. For example, a borrower cannot access title loans to cover the cost of repairing a motor vehicle or to cover the cost of replacing a vehicle that has been stolen. This is known as “short-term” title loans. Other restrictions include the need to pay back the principal as quickly as possible or face a penalty. This is referred to as “payday” or “payment” loans.
There are also some fees that are applicable. Some title loans are secured with collateral and therefore come with a fee for each day that the borrower extends the loan. Title insurance premiums are one such fee that borrowers must consider carefully before applying for title loans. These premiums are not assessed automatically but must be paid in advance each month. Other fees may be applicable if borrowers borrow a larger amount of money than they plan to spend. Such fees are often waived if borrowers take out a co-signer who is a resident of the borrower’s household.
You can get more enlightened on this topic by reading here: https://en.wikipedia.org/wiki/Loan.