When you are searching for a sure way to find some quick cash while facing a big life issue, you can undoubtedly opt for car title loans online. This short-term secured auto loan can offer you a fast influx of cash to deal with your short-term needs. Although it’s a great opportunity, one must carefully review the pros and cons of this financial product to make a sound financial decision. This loan would work great for you when you plan to pay back the auto loan on time. However, the reality is that it’s hard to pay off a car loan quickly. Before you make any deal, make sure you see both sides of this coin.
Pros of a Title loan
Here are some benefits that are convincing many people to go with car title loans online.
Title Loan is a Good Choice If You Have Bad Credit
A person with bad credit finds it hard to secure a traditional loan like banks, and financial institutes look at your credit score. A good thing about car title loans is that the lender doesn’t base the loan on your credit score. That’s why borrowers with bad credit still have a good shot with this type for a loan. The essential requirement is vehicle qualification, though. You must be the owner of the car for this loan. A title loan could be your only best option when you are rebuilding your financial situation and don’t want your credit score to fall back to a bad place.
Quick Cash Availability
A significant reason that is boosting the interest of people in car title loans is immediate cash availability. When you have a big life emergency to deal with, such a loan works as a real lifesaver. You can have all the cash resources in your pocket and feel great relief.
Comfortable Loan Option
Nowadays, people are looking for a convenient financial solution, and indeed, the title loan is the one. It’s a type of loan that allows a person to sit on his couch and apply for the loan. No need for a store visit, no more paperwork, and no need to book an appointment. Apply for the loan and get cash in your account within the same day or next business day.
Cons of Title Loans
Here are some shortcomings that you shouldn’t overlook while thinking of getting car title loans online.
High ARP – You need to understand that a car title loan will work in your favor only when you are planning to pay it back within a short period. The cost of a loan will increase due to the high annual percentage rate. In case a person doesn’t pay back the loan, some lenders don’t charge late payment penalties, but still, interest will add up in this loan, making it an expensive choice. The risk of default will become higher, too, you should try to avoid this situation.
Risk of Possession
A thing that you can’t overlook in any case is the risk of possession. You are putting your car as the collateral for this loan, and your inability to pay the loan means losing your car. However, most lenders don’t want to use this option. They offer you flexible terms and time so that you pay off the loan within the required timeline.