Car title loans have received a bad reputation. People say that these lenders are without conscious and make their money simply by charging exorbitant interest rates. Naturally, there are some bad lenders out there. The reality is, however, that car title loans have given people the help they need during some very difficult times. So long as you know what to look for, these loans can be very beneficial. And since they are now government regulated, there are far fewer risks as well.
What Is a Car Title Loan?
A title loan is a unique construction. Technically, it is a secure loan, as you put up the title deed of your car as collateral. This title will remain with the lender until such time as the loan is paid off. However, in the meantime, you can continue to use your car. The amount of money you will be able to borrow depends on your vehicle. Generally speaking, you will not be able to borrow more than 50% of the value of your vehicle and most lenders will not issue more than $2,500. The money should be in your account the same day, or the next business day if you applied too later.
You do, however, have to understand that if you apply for car title loans in Houston, there is a chance that you will lose your vehicle. However, this will only happen if you do not meet the repayments on your loan. If there is a chance of that happening, you should not apply for a loan in the first place. It would then simply be better to sell your vehicle, as you would probably get more money cash in hand then as well.
More and more often, car title loans can be paid back over a period of time. At first, they were short term loans that would have to be paid back within 30 days, but this is now changing. Additionally, while the interest rates are high, they are now regulated on federal, state and local level. Strict laws are in place that lenders have to adhere to. As a result, you should no longer find yourself in a situation where you obtain a loan from a disreputable lender.
However, you should still take the time to review the different options that are out there. A quick search for title loans in Houston will reveal a great number of results and it is important that you find the one that is most suitable to you. Some of the things you may want to take into consideration in order to choose a lender include:
- What percentage of your vehicle’s value are they willing to borrow you?
- How do they determine the value of your car?
- What is the interest rate?
- What type of repayment options do they offer?
- What happens if you can’t pay your loan back?
Car title loans are great solutions for people with an immediate financial need.