Car title loans are a type of short-term loan that is taken out against the equity of a car you own. If your car is worth $20,000 and you have an outstanding loan of $5,000 on the vehicle, then you can be clear of debt without having to sell the car by borrowing more money or taking out a long-term loan.
Car quick title loans are also advantageous because they reduce your auto insurance premiums, because they do not consider the vehicle as being in default. This means that there is no risk to lenders when they lend money. Here are some more advantages illustrated:
1. It is a short-term loan
The length of the loan you choose to take out will vary depending on your budget and personal requirements. Short-term loans tend to be offered at 7 days, 3 months, and up to 60 months. Check out auto loans from Space Coast Credit Union for more information.
2. No credit check required
Once the seller has received all of your information, including the title of your vehicle and an estimate for how much you will pay back over the period you want to borrow, he will give you a document that allows for you to apply for a loan. You can choose from several lenders, as long as your vehicle is insured and not in default. You will also need the title of your car, as the title will be used to guarantee the title loan.
3. Car title loans are easy to receive
You should not have too much trouble getting a car title loan as long as you own your vehicle outright, have proof of income and a valid driver’s license. You should check with your local lender to confirm their requirements and to learn more about their application process, including how they approve applicants and what interest rates they charge.
4. No collateral is required
With car title loans, you will not be required to put up any collateral such as stock certificates or jewelry in order to receive the loan. The interest rate you pay for a car title loan is fixed and will depend on the amount and duration of the loan you choose. A lender sets the interest rate per day, month or year and will use this to determine how much you’ll pay back in total, as well as the amount of money you pay each month.
5. A car title loan is tax-free
You will not be paying any federal tax on a car title loan, because interest payments are considered deductions in your taxes. If the loan is administered by a third party, then state taxes may apply, depending on where you live.