If you are in need of quick money, but your credit scores are keeping you from the traditional short-term loans, consider the option of car title loans. Taking up car title loans in Brampton offers an easy way of getting quick cash with minimal income verification and no credit check. Title loans are based on the equity built-up in a borrower’s vehicle.
Therefore, it is important for the borrower to have a clean title over their car. If you still owe money on your auto loan, your vehicle’s title is in the bank’s hands. Hence, the title loan lender may not be willing to use your vehicle as collateral. Other requirements for getting qualified for the title loan include: proof of income, a minimum age and proof of residence.
- How title loans work
The amount borrowed in a title loan is often determined by the value of collateral (i.e. the vehicle). The lender evaluates the vehicle’s price based on the auction value and gives a loan of between 30% and 50% of the vehicle’s worth. Nevertheless, it is possible to find a lender who offers more. The lender then takes the vehicle’s title and returns it back to the owner once the loan is repaid.
This short-term loan offers a high interest rate. In the event of defaulting on your loan repayment, perhaps by failing to submit your repayment within the stipulated period, you risk losing your vehicle to the lender.
- Understand the contract
Simply walking to a title loan company and getting some quick money may sound easy and simple. However, before signing the contract, it is advisable to read the fine and large print. This will help you discover early enough what you are getting yourself into. Consider the contract carefully and determine how the interest is calculated, as well as the period it is calculated. For example, a 4% rate may look okay, but a closure look could reveal the 4% applies to a month, which translates to 48% annually. It is equally important to know the penalties for nonpayment or late payments and the mitigation rules.