No trips to the bank or outrageous rates, just a simple agreement that benefits both the lender and the borrower. Auto title loans are convenient, fast and affordable. When facing huge debt, auto title loans can be a saving grace.
New Westminster, BC -- (SBWIRE) -- 01/22/2016 -- Borrowers with a bad credit score can opt for this option of using their car title as a collateral for the loan. The borrower should have the plan to repay the loan responsibly, doing that will get one out of the jam and also improve the credit ratings. A bad credit rating can actually create a lot of problems for an individual living on paycheck to paycheck. Many a times, when there is a need of emergency cash for unexpected expenses such as:
- medical emergencies
- educational expenses
- home and car repairs
- natural disasters
At such difficult times, the borrowers face difficulty obtaining the funds, since their bad credit history makes them a risk for the lenders. When borrower puts up the vehicle as a collateral in case the borrower defaults on the loan, the car play the role of security to lenders. People prefer getting auto title loans as it is a quick cash source compared to others traditional loans.
Since the security offered is an auto title loans is a car title, the loan will be secured based on the car value. If the borrower fails to make any payments according to the predetermined repayment that is scheduled by the lender, then the car can be seized by the lender. To qualify for an auto title loan, one must own a car and it should be registered on the name of the borrower. The car will be used as collateral, and the car should be paid off or should be closer to be paid off.
Most of the lenders will lend up to a certain percentage of the wholesale value of the car, to protect themselves in case the value of the vehicle drops over the term of the agreement. This is typically between 25 to 50 percent of the wholesale value of the car. In some cases, the percentage goes up to 100 percent of the value of the car. Most lenders usually does not offer 100 percent because, if the borrowers default on the auto title loans, the lenders may have to incur costs during repossession and they may not be able to sell the vehicle at its full price.
All the scenarios that are possible to happen are carefully factored into the loan agreement. While applying for an auto title loan, make sure to choose a lender who offers the most flexible repayment options with low interest rates. It is quick and easy to get these auto title loans approved and get quick cash when a person needs it the most, that is why a auto title loan is so attractive for all the borrowers in case of emergencies.
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