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What is Title Loan & How it Works?

Tags: loan

Loan comes in many forms and all have varied terms and conditions. Some loans have only simple verbal agreements between family members. While some loans require quite complex arrangement with lending institutions. It means lending money for significant items such as car, property etc. If you need Loan for any essential item to make your life more easier and manageable, then you must know how loan works. Today we will be focusing more about Title Loan. What is Title Loan? Title Loan is a type of secured loan where borrowers can use his/her vehicle title as collateral. In United States, Title Loan is also known as “Car Title Loan“.  In car title loan who gets the loans i.e borrower must allow the lender to put lien on car, and temporarily surrender the hard copy of car title, in exchange of loan amount. As soon as the loan is repaid, lien on car is removed and the original hard copy of the car is returned to its owner again. If borrower found to be defaulter or unable to repay the loan, the lender is liable to sell it to repay the borrower’s outstanding debt. These kind of loans are short term and posses high interest rates as compared to other source of loan. In these type of loans lenders generally never check the credit history of borrowers, they only consider the value, quality and condition of the vehicle which is going to be on lien to borrow money. Most of the car title loans in united states can acquired within 15 to 30 minutes or less on an amount as little as $100. Most of the financial institutions doesn’t allow loan under $1000 to anyone without credit as these will be non profitable and too risky. In addition of verifying borrowers vehicle hard copy, lender may verify that whether the borrower has some source of income or not. But they rarely consider borrowers credit history or score. How Car Title Loan Works in Texas, United States? To get Title loan borrower can look for lender online or at a store location. In order to get the car title loan the borrower will need to have some required documents like: valid government issued ID such as Driver License, Residential Proof, Car Registration, Car insurance etc. To get title loans in texas, borrowers vehicle must have car insurance. Maximum amount of loan is basically determined by the collateral. Normally lenders offers up to half of the car resale value, though very less amount of lenders allow more than that. Resale value of the vehicle is determined by lenders using the Kelley Black Book. It is required that borrower must hold the clear title of the car i.e no liens or current financing should be there. Based on the location of lender the interest rates on loan may vary from 36% to 100%. Payment schedule may vary a little as the borrower has to pay the interest due to every each due date. At the end of the loan […]

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What is Title Loan & How it Works?

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