What is a Car Title Loan?

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What is a Car Title Loan?

In need of a small amount of money for a short amount of time? Discover what a car title loan is and how you can get one...

If you’ve been hammering the phrase “are there any car title loans near me?” into Google lately, then you’ve finally found the right place. TFC Title loans is a website that informs and facilitates you with all type of title loans. They offer you instant solution when looking for emergency funding in your area will guide you to the best place to get the loan. But first, what exactly is a car title loan?

What is a Car Title Loan and How to Get It?

Photo, Roland Denes.

A car title loan is a loan for a small amount of money and short period of time: To get a title loan, you give the lender the title to your vehicle; your car, truck or motorcycle. You also pay a fee to the lender to borrow the money. The time period to pay back the loan is usually 30 days. The only catch here is that car loans are expensive and if you are unable to pay the money you owe to the lender, he or she may take your vehicle.

How to get the car title loan: The process varies from lender to lender with the basis being the same. The usual procedure requires a person to either contact a title loan facility near their area or drive to the place themselves. After that, if you are sure about taking the loan, you are required to submit some important documents for example your ID card, your application, the title to your car, proof of income, residency, insurance etc. And of course, your vehicle as well.

Some lenders also ask their customers to give in an extra set of keys just for their own protection. You may be required to buy a road side service plan, and asked to give in photos of your vehicle to the lender. Mostly, lenders check the vehicle in person to verify the correct condition of the car. It is advisable to visit the lender in person so the latter can check the validity and authenticity of the paperwork. For security purposes, some lenders may insist on installing devices that track your location. They do not keep a check in secrecy, but rather inform the client about the installation.

It should be noticed that after submitting car title loan application, you have to wait for it to be approved by the lender. If your application is rejected, you have to work on it again and resubmit it. If the lender accepts your application, you will be prompted to deliver your vehicle title. Then the lender will place a lien on your vehicle. After that, you agree and sign the agreement guaranteeing that you will pay the loan within the given time period by following the relevant guidelines. Once you receive the agreed amount, you get the cash. Simple.

What is a Car Title Loan and How to Get It?

Photo, Kelly Sikkema.

How much does a car title loan cost? Generally, lenders charge a monthly fee. This can be a lot, sometimes 25% of the amount you plan to borrow.

How to compare costs: Most loans come with annual percentage rate. This is known as APR. APR tells you how much it will cost you to pay money for a year. The APR on car title loans can be pretty high. Make sure when you get a car title loan, the lender gives you a detailed account of APR and the cost of the loan in dollars. The APR comprises of a number of factors such as the amount of money you borrow, the monthly finance charge or interest rate, how much you pay in fees and for how long you will borrow the money.

What happens when you are unable to pay the money you owe to the lender? You may get caught up in a situation when you cannot pay the lender and the money is due. In this case, the lender might let you borrow money for another 30 days putting another monthly fee on your shoulders. This approach is called roll over or rolling over the loan.
If you keep delaying paying your loan and continue rolling over your loan, you might pay a lot to borrow the money. In this case, it will become more stressful for you to pay back the loan.

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