Car Title Collateral Loans Information
A car title is a legally binding document that determines you are the owner of a vehicle. The Department of Motor Vehicles (DMV) issues one for every vehicle. When you buy a car, from a dealership or private seller, the title is put in the name of whoever is paying for the car. If you finance your vehicle, then the bank’s name will be on the title until you have repaid the loan. Once that is done, the title is put in your name. This is a ‘clear title’ with no liens (loans) against it. If you are selling a car that still has loan payments, then you might not qualify for title collateral loans. Learn the process on how to start using your car as collateral.
Collateral Loans on Vehicles
When buying a car with collateral, you can use a clear title as collateral for a personal loan. Loan companies will accept a clean car title as collateral for any loans you might need. Collateral is an asset or assets promised as security for a loan. Title loans are usually fairly easy to obtain. There are usually title loan shops in any city or you can go on the Internet and find companies in your area that will allow you to apply for title loans online and then they will send a representative to you to assess your cars value.
Many title loan businesses don’t check your credit and can usually get you a check in less than an hour.
Some companies require full insurance coverage while others don’t deem it terribly important. It is always a good idea to have insurance on your vehicle, most states require it by law.
Some of the documents you will need for a car title collateral loan are:
- Clear title to the car.
- Car registration and insurance card.
- Current utility bill.
- Bank statement.
- Pay stub.
You may also be asked for:
- References from family and friends
- Spare key.
Car title loans are usually for about 50% of the value of the car, as ascertained by the loan company.
Read the fine print very carefully; interest rates can vary from 36%APR to 300%APR or more.
Car title loans are typically for 30 days. If you haven’t repaid the loan by then, you may be able to roll into another 30 day contract. However, borrower: beware. If you can’t pay in 30 days, the car title loan company can legally take your car.
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