A car title loan or a pink slip loan is a type of short-term and secured loan where the borrower uses the title of his or car as collateral against the debt.
Most people who go for car title loans are those who do not qualify for other financing options due to their bad or poor credit or the documentation required from other big institutions like banks.
If you live in a state where car title loans are allowed, then you can always explore the option of this type of loan if you own your car free and clear with the title in your name. The way it works is that the lender places a lien on the title of the car the borrower uses as collateral in securing the loan.
The amount of loan that can be gotten depends on the value of the car and the income the borrower earns. You can get as much loan as the value of your car.
When you get a car title loan, you can still drive your car around. Although, some lenders will install a GPS tracker in the car for proper monitoring and control. You can get between 25% TO 50% of the value of your car. The loan is paid back on a monthly basis until the entire loan amount is fully paid. As soon as the loan is fully paid, the borrower reclaims the title lien-free.
The lien placed on the car is to enable the lender assume ownership of the car and makes it easy for the lender to repossess the car should the borrower defaults payment or fails to comply with the loan terms and agreement.
Documents You Need to Apply for a Car Title Loan
You need the following documents to apply for a car title loan;
Proof of car insurance
Original vehicle title showing sole ownership
Present vehicle registration
Government-issued identification that matches with the name on the title
Utility bill or other proof of residency matching the name on the title
Current vehicle registration
Proof of a steady source of income such as a recent paystubs or other proof of ability to repay the loan
References with their names, addresses, and phone numbers
Working copies of the vehicle's keys
Some lenders will attach GPS tracker to the car, in case the borrower defaults and the lender wins the right to repossess the vehicle. This is to enable the lender disable the car remotely.
All Credit Categories Can Qualify
Whether you have good or bad credit it doesn’t matter when you apply for a car title loan. You can still qualify despite your credit score. Most lenders will not even check your credit since they are more concerned about the worth and resale value of your car. Also you do not need to be employed to qualify for a loan but you need to show that you can pay the loan through other sources of income such as annuity, rent, and retirement benefits among others. Find out more at https://car-title-loans.wixsite.com/theblogger/home/what-states-are-title-loans-legal-in-and-where-does-tfc-title-loans-operate.