People aspire to have all the comforts of life. They desire for materialistic items like having their own car and home which can be used whenever needed. Yet, it is true that many of these objects are way too expensive to fit into everyone’s budget. But they are a worthy investment. When an individual is in need of money, he can opt for auto title loans to suffice his needs and dreams. In this kind of loan, the bank provides the money to the customer, keeping his car as collateral. He keeps the title of the borrower’s car which serves as the security of the loan. In specific cases, where the borrower is unable to repay the loan amount, the bank has the right to confiscate the car, sell it and recover the money owed to them.
The car title loan is a short term loan. Its repayment duration may vary from a mere fifteen days to thirty days depending on the agreement between the customer and bank. The repayment period can be renewed but the bank keeps the car title and a set of keys while the borrower can keep the physical car. These loan types are opted by many as they can be approved within a day, provided all the necessary documents are provided to the bank or financial institution. You can choose to fill the form online or by going personally to the bank. It is an easy and convenient medium to apply for the loan in just a few minutes. Once the form is submitted, the bank representative will call the customer and set up a personal interview.
The terms and conditions of the loan may vary from one bank to another. In general, they have a high rate of interest as the lender does not run a credit check of the borrower. There are some basic requirements to be eligible for the loan. The first one being that the borrower’s vehicle must be paid in full. Secondly, there must be no financing against the car. The vehicle that is being used as collateral should have a full insurance cover. Yet, it must not be forgotten that in case the borrower is unable to pay the loan, his vehicle will be confiscated. Generally, the banks adopt this approach only in the rare cases as they too lose money in the process of repossession, auction and court costs. Importantly, as the value of vehicle depreciates once it is bought, the banks too are at loss along with the borrower.
For sure, many lenders find it difficult to repay the loan to the banks, but it is still advisable to get rid of the short term debt as soon as possible. Once your vehicle is confiscated you will be marked as a defaulter by the bank. It is advised to take these loans only if you are confident enough to be able to repay them with ease. Living debt free is surely a wise choice if you do not want to keep your finances at bay.