As far as Car Title Loans are concerned, the FTC doesn't mince words and it is very much advisable to think about it twice before getting a car title loan, leaving the option for only when you need money for emergencies such as medical emergencies.
How Do Title Loans Work?
Title loans are a form of short term loan which lasts no longer than 30 days and in exchange for cash, you have to give you the title of your car till you have repaid your debt. Some lenders give the loan even when a car isn't completely paid off yet just as long as there is sufficient equity in the vehicle. Most times the loan amount is no more over 50% of car value and when you have paid hour debt, you get the title of your car back.
Applying for the Loan
When applying for a loan, you do not have to go through the stress of credit checks as you can still apply with bad credit or no credit at all. But you would be required to fill out an application form and this is available online for some lenders. Documents which would be needed include a photo ID, your vehicle's title as well as proof of insurance.
What Are The Disadvantages of Title Loans?
Although they are simple to get, they are quite expensive to pay off and you risk losing your car. Your car can sell more than the loan amount and although some states order for the return of the difference, it doesn't apply everywhere.
How to Protect Yourself
Under federal law, a title loan lender is required to offer you a written contract which states what fees you are required to pay. To understand things you do not understand, ask the lender to explain properly and read any document before signing.
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