Do you ever wonder why more people are turning to car title loans? If you are looking for an answer to that question, then you are landed at a place where you can have your answer. Different people have different reasons to go for this kind of loan option. Below, you can explore three everyday situations when people opt for a car title loan.
Reason No.1 When You Don`t Have a Good Credit Score
Sometimes, you need cash to handle your utility bills, to pay a high-interest loan or to manage other life expenses. You don`t have an outstanding credit to acquire a secure loan from a bank. Even when you go to a financial institute other than a bank for an unsecured loan, you have to give proof of income, and that institute cares about your credit score.
If you don`t have a good credit score, then getting money becomes a challenging task. People start turning to car title loans as it doesn`t require a credit check. It`s not like a lender will first review your credit score and history and then give you money.
Instead, he will use your car title as collateral for the loan. Since this loan is secured by your car, therefore there is no significant default risk. You can get a percentage of your car value from the lender.
Reason No.2 When You are Looking for an Easy Way of Acquiring a Loan
A lot of paperwork is involved in acquiring a loan from a bank; you need to furnish many documents like proof of income. However, when you go to a lender who has a good track record of issuing the best car title loans to the borrower, you know one thing for sure, that process is simple and straightforward.
It`s not like gathering a pile of documents and then to get a loan. The main document which is required by the car title loan lender is your car title paper. If you own this car, then you can use its paper to get a loan. No credit check is required.
In most cases, you can get a car title loan within 24 hours. It`s simple. It`s easy. Therefore, more and more people are turning to car title loans.
Reason No.3 When You Don`t Want to Put your Home at Risk
It happens that you are in dire need of cash, but an unsecured loan isn`t on the table. When you think of a secured loan, mortgage or Equity home loans seem like a great idea, but you don`t want to put your home at risk. If you are unable to meet the monthly payment schedule of a mortgage or home equity loan, that means you are going to lose your home; it`s not what you want to do.
So, you think of a less risky option and is available in the form of a car title loan. Yes, your car is used as collateral, but losing it isn`t as significant a loss as losing a home. So, you do the math the right way by taking into consideration both the significant risk factors. When you don`t have credit and don`t want to put home as collateral, an ideal solution comes in getting a car title loan.