What Are The Benefits of Car Title Loans?

Car title loans allow you to collateralize the equity you have in your vehicle to receive instant liquidity when you need it. You are taking the risk of having your car seized if you default on the loan. However, instant car loans have many advantages over other loan alternatives. Namely, they are cheaper, faster and easier to obtain than other options. If you need instant liquidity and are comfortable risking your auto to attain it, you will gain these benefits. 

Cheaper than Unsecured Loans

Using your auto to secure a loan will make the loan less risky for the lender. When a lender is assuming less risk, they will charge you less for the financing. This means you will receive lower interest rates when you collateralize your auto than if you seek an unsecured loan. Over time, interest rates will make a big different in the total cost of your loan. Since instant car loans should be used only when you cannot wait to receive the cash, you should not pay more than you need to obtain one. Paying high interest rates on an emergency loan can leave you in a worse position when you are finished than when you began the loan process. 

Faster than Home Equity Loans

Home equity loans are an alternative to car loans. Both are typically short-term loans, maturing in 1 to 3 years. It is very difficult to tap into the equity of your home without an accurate home assessment. This can take months to arrange and can be costly. Conversely, it is fairly simple for a lender to determine the equity you have in your car. Using either the Kelly Blue Book or the National Auto Dealer Association listed value, a lender can see what your car is worth on the market at any given time. The lender can then take your car title as collateral and have some assurance regarding how much they could sell the car for at auction. The real estate market is never as definite.

Easier than Personal Loans

Personal loans can be very difficult to obtain for individuals with less than perfect credit. Personal loans are extended on the basis of your financial status including your credit score, credit history, salary and other typical loan factors. If you are in a compromised financial state and need cash, it may be easier to simply use and auto you retain equity in, regardless of your credit. Banks and lenders are more likely to extend a loan based on this asset if you are a high risk borrower. 

 


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