Depending on the borrower’s vehicle equity, the borrower can borrow up to whatever the maximum the loan company may offer. Some loan companies offer up to $100,000 and others may offer lower loans of up to $5,000. Obviously if the borrower is driving a Mercedes or BMW they will be looking at a larger loan value, but every title loan pawn company in Georgia is different.
The borrower has handed over their vehicle title to the title pawn company. During the loan process, the title pawn company collects interest. Again, all companies are different. Some companies use high interest rates, and other companies use low interest rates. Of course nobody would want high interest rates, but the loan companies that may use these high interest rates, probably also give more incentives to the borrowers. What are the incentives? It depends on the company, but it could mean an extended loan repayment process of up to “x” amount of months/years. It could mean the loan company is more lenient on the amount of money finalized in the loan.
The borrower cannot come up with the money, and the company has been very lenient with multiple loan extensions. The company legally receives the collateral of the borrower’s vehicle title. Meaning the company receives ownership of their vehicle. The company can either sell the vehicle or turn it over to collections. So are car title loan companies a scam? Absolutely, NOT. The borrower just has to be careful with their own personal finances. They must know that they have to treat the loan like their monthly rent. A borrower can also pay-off their loan as well. There are no restrictions on paying a loan. He or she could choose to pay it monthly, or pay it off all in a lump-sum. Just like every situation, the sooner the better.
Car Title Pawns
The Pros of Car Title Pawns
The most clear-stated pro would be the advantage of receiving instant cash. Anyone could walk into their local 7-11 or convenient store and purchase a state lottery ticket. That process is extremely easy; however the probability of receiving a large amount of cash instantly is extremely low. The probability of receiving instant cash at your local auto loan company is extremely high. Unlike traditional banks, and credit bureaus, another advantage of the car title loan industry is NO CREDIT CHECKS. Most of the time, borrowers come to tile loan companies because they’re stuck in financial situations. Their credits scores are usually poor at this point, after collections have had to continuously made adjustments because they couldn’t pay their bills on time. That is a major “Pro” for a car loan company. No matter what the borrower’s credit score may be, the borrower is still qualified to receive a car title loan. Another pro of the car title loan industry (which was actually mentioned previously in the article) is since the borrower is putting their car loan as collateral, it is easy to convince the lender to extend the loan to you.
How does a borrower qualify? Like stated before, there is NO CREDIT CHECKS, therefore the borrower is already pre-qualified for a loan at this point. However, the borrower must meet the following requirements to receive a car title loan. The borrower must be over the age of 18 years old, the borrower must be the owner of their vehicle title, they must have already paid off their vehicle liens-free, and they must have a valid driver’s license or state identification card.
How long does the application process take? The simplicity and speediness of the application process is another “pro” or advantage for the car title loan. The average online application just asks basic personal questions pertaining to the borrower’s vehicle, and location. The application roughly takes about a minute or less to complete. Most companies get back to the borrower within a few minutes of submitting an application. Once the loan representatives read through the borrower’s application information, they quickly give the borrower a call based on the number provided in the app, and go over the details and process of obtaining a loan.
How long does it take to receive the loan? Every company depends and probably has a different loan process, but it usually takes within 24 hours or less to receive the “instant cash”. That is another advantage, or “pro” of the loan industry. Traditional banks, and credit bureaus, can take up to a few weeks to finalize the loans. By that time, the borrowers would have already lost their homes, been in serious debt, etc. Taking out a car title loan is the best financial choice. Check.
The Cons of Car Title Loans
Now that we looked at the Pros, let’s look at the Cons of car title loans. Honestly, no financial decision is 100% perfect. Nothing is perfect, but some things get close. If this article was based on telling the reader that the car loan industry is the best financial choice, then the article would be full of shit. That’s why the title is “key-worded” “Choosing the ‘RIGHT’ financial service. Not the BEST. The “Right” financial service. Remember, nothing ever is perfect, especially in finances, but some things come close.
The cons of a car title loan are indeed straightforward. The borrower is basically handing the ownership of their personal transportation over to the car loan company as collateral in order to receive a cash loan. As stated before, the borrower can face extremely high interest rates- depending on the company. If you have poor to no credit because of your financial situation, and learn that you cannot pay-off the loan you will be stripped of your vehicle, and instead of being able to alleviate your debt, you will fall into even more debt. At this point, the collections agencies will be completely done with you. The saying “follow the directions, and it’ll turn out right” is extremely important and accurate when obtaining a car title loan. A borrower may also be at risk of taking out a loan from a disreputable company that will charge extra fees on top of the accrued interest, or instant hidden feeds that were written in the fine print in the contracts, that are almost impossible to see, unless observed carefully with a magnified glass. Thus, a borrower must be careful before making a finalized decision in any financial situation, especially when their biggest ticket possession is being used as collateral.
It is up to the borrower to make the right financial decision. The final decision is the hardest part. The final step is always the hardest part because the borrower now has to make a final decision whether he or she wants to take out a car title pawn Tifton ga or choose to use another financial recourse. Honestly, after everything stated in this article, it would seem to be that choosing a car title loan is the right financial service. Again, banks and credit bureaus take too long to process a loan, so why choose them? If the borrower is in need of fast cash, they might want to consider choosing a car title loan.