Are you in need of quick cash but don’t want to sell anything you own? A title loan could be the fastest and most convenient way to achieve this.
Fortunately for you, we’ve accumulated everything you need to know here about the process of acquiring title loans. Read on to learn more.
What Is a Title Loan?
A motorcycle title loan is a short-term secured loan that lets borrowers use their vehicle as collateral. These loans typically last for 15-30 days and range from 25%-50% of your vehicle’s value. Take time and make sure to review your guide before making a final decision on a title loan.
How to Get a Title Loan
To receive a title loan, you’ll need a clean title and in most cases, 100% ownership of the vehicle. The lender will want to see the vehicle, a photo ID, and proof of insurance.
If the loan is approved, you’ll forfeit the title of the vehicle for the amount requested, plus the lender’s finance charge and any other fees.
Motorcycle title loans can be pricey. They usually have an average monthly finance fee of 25%, which is an APR of about 300%. If you’re unable to repay the amount in question, you’ll have the option to roll over the loan and pay additional fees or surrender the vehicle.
When You Should Get a Title Loan?
On average, around 20% of car title loan borrowers have their car seized when they can’t repay their loan in full. A large portion of auto loans become long-term debt due to the borrowers’ inability to pay the debt back in one single payment. A title loan, due to the chance of losing your vehicle, should only be considered as a last resort.
What Information to Look for When Applying
A motorcycle title loan is treated like other types of credit, which means the lender must tell you the price of the loan before you agree. Read the loan agreement carefully for any additional fees, including rollovers.
Also, make sure to check with state laws and regulations regarding payday and title lending. Some states protect people from high-cost payday lending and require lenders to be licensed with the state.
Advantages and Disadvantages of Title Loans
A title loan can be a great option for those that might need cash quickly. However, there may be some disadvantages to be aware of as well. Make sure to review the pros and cons of a title loan before deciding that it is the best option for you.
Advantages of a Title Loan
- No credit check
- Quick access to funds
Disadvantages of a Title Loan
- Could lose assets
- Short repayment terms
- High interest and fees
Is Now the Right Time to Get a Title Loan?
Using this information will help you to assess if now is the right time for you to take out a title loan. A title loan can be used successfully with the right amount of preparation and responsibility.
It’s rarely ever easy to tell if now is the right time to take out a title loan. If you need quick cash and want more information on this topic, refer to our blog.