Auto Title Loans
Auto title loans are short term loans. The most common auto title loan is a car title loan. The borrowers need to put their car as collateral against the loan. Borrowers who get title loans must allow a lender to place a lien on their car title, and temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount. When the loan is repaid, the lien is removed and the car title is returned to its owner the lenders who offer such loans are termed as auto title lenders. It is type of cash advance which is offered for a very short period of time. The lender decides how much amount of money he can give and you promise to hand over your vehicle if you do not repay as agreed. Before you use a auto title loan, make sure you know the pitfalls. In general, auto title loans are small loans. They are a good deal for the lender, since they have a good chance of getting all their money back by selling the asset you pledge. This means that auto title loans are often not as advantageous for borrowers. You put a lot at risk for a small loan. Rolling over of an auto title loan can prove to be expensive because the rate of interest charged on these loans is much higher than in case of the usual loan program. The interest rate, which is usually charged on a monthly basis, may range from 10% to 25%. There is one more important thing to note, if you owe anything else on the car, you will not be able to qualify for an auto title loan. Since it is a secured loan, if because of any reasons you fail to repay the loan in time, the lender will take possession of your car and sell the same to recover the loan amount. Alternatively, the lender may just charge you the amount of interest for one month and rollover the loan for another one month. You can keep rolling the loan over and over again for as many months as you want, however this can become an expensive option. Auto title loans are generally expensive. Before you use a auto title loan, explore all of the alternatives. Overall, an auto title loan is the best choice for those who are facing a temporary financial crunch and are sure that they can repay the full amount within a month.
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