The holidays are quickly approaching, so you may be decorating, planning menus, and shipping for gifts. While these expenses are something you can plan for, surprise costs may arise during the holiday season, wreaking havoc on your budget. In these situations, you may need to find some extra cash for you and your family.
Fortunately, many individuals are seeing the benefits of vehicle title loans, which offer you a fast and convenient method of gaining cash when you need it the most. However, most people do not fully understand how these loans work. With this guide, you will learn a few important facts about using title loans for extra cash around the holidays.
Not Available Everywhere
Before you even contemplate a title loan on your car, truck, SUV, or motorcycle, you need to determine if they are even available in your state. Because of the higher interest charges, these loans are considered illegal in some states.
For example, title loans are legal in Alabama, Florida, and Wisconsin, but there are limitations and restrictions on the loan amounts and APRs. Also, California, Kansas, Louisiana, and South Carolina have strict loopholes to follow with these loans.
It is important to note that these laws change each day, so you must do your research before assuming title loans are permitted in your specific state.
You Control the Funds
Some banks will prefer to disperse the borrowed funds to account holders on your behalf. For example, a personal loan from your bank can be used to pay a bill or pay off multiple types of debt. With a vehicle title loan, you are in control of the funds that you borrow.
Not only can these funds be used to pay bills, but the money can also be used to purchase gifts, buy groceries, or anything else that you need to purchase or pay.
You do not need to notify the lender how or why you need the money. You will have complete control over your funds.
Credit Is Not an Issue
Most banks or lenders require a specific credit score to be approved for a loan. If you have had past issues with your credit, you can still receive money you need in an efficient manner by applying for a vehicle title loan.
Most title loan companies do not have specific credit scores qualifications because your title will be used as collateral. If you own your vehicle or motorcycle, you do not need to have good credit to be approved for a title loan. However, there are risks involved if you do not pay this loan as direct.
Late and missing payments will be reported to credit agencies, so defaulting on these loans can hurt your credit. In addition, not paying the loan will result in forfeiting the vehicle's title. This means you will no longer own the vehicle or motorcycle, which can be a costly mistake.
May Be Right for You
A title loan is not the right option for everyone. If you are employed and have a good credit score, you should consider opening a credit card or applying for a loan with your personal bank.
If you do not have a realistic plan for paying for the loan, you should not apply for a title loan. Without making on-time payments that will include the borrowed loan amount and a great deal of interest, you will be at risk of hurting your credit and losing the vehicle entirely.
If you have a title and the means to pay back the money in a timely manner, a title loan may be right for you.
Proper understanding is key before applying for any type of loan. With this guide, you will have a better understanding of title loans against your car, truck, SUV, or motorcycle. For more information, contact companies like Tennessee Title Loan.