When the need arises for unplanned expenses such as a medical emergency, borrowing money is the very next option. But in a situation where you can't borrow money from anyone you know your credit score is bad, then using your car as collateral for a loan would be the best option for just about anybody.
How does a loan backed by a car title loan works?
A car title loan works just as collateral, you just have to give away the title of your car in exchange for cash. It isn't only limited to cars as other vehicles the likes of SUVs can be accepted as well. Once you give away the title of your car, then it belongs to your lender till you repay your debt. Most times you can keep driving your car till the Loan is paid off and if you are unable to pay, you stand a chance of losing your car
How high are the interest rates for auto title loans?
Interest rates for an auto title loan vary from lender to lender. But mostly you would be given an interest rate and not an APR. But in a case where your loan goes up to a year, then you can calculate the annual interested rate from your interest rate. If your interest rate is set for 20% monthly, that means your interest rate would be a total of 240% annually. You can also negotiate with your lender as they can offer a competitive interest rate which can be below stare standard.
How much can I borrow if I use my vehicle title as collateral?
The amount in loan you get depends on the value of your car. This is why you would bring your car for your lender to inspect. After inspecting a car, your lender would make an offer based on their appraisal. Most times you get 50% of the worth of your vehicle.
The duration of your loan can last for months and sometimes a few years. It all depends on what you and your lender agree on and no matter the duration, you get to keep driving your car and lenders do not require credit checks for this type of loans.
Auto equity loans n all you need to know are explained here >>> https://www.nerdwallet.com/blog/loans/auto-equity-loans/
