Risks and Rewards of Instant Auto Title Loans
Instant auto title loans are handy when you need cash and lack the credit score or time to wait for a traditional bank loan. With a title loan, you usually have cash in hand within a business day. All it takes is your clean title, a photo ID, and a trip to the title loan lender so that they can appraise your vehicle. As with any loan product, there are risks and rewards with an instant auto title loan.
Immediate Cash Without a Credit Check
With an auto title loan, you don’t have to have your credit checked. If you have poor credit or even no credit, you still qualify for a title loan.
Keep Driving Your Car
You can keep using your car during the time the title loan is in effect. Don’t worry about getting to and from work, the grocery store, or school. As long as you provide proof of auto insurance and are signing up for a title loan and not an auto pawn, your car is yours to drive during the duration of the loan.
Make Sure You Can Pay
With the positives have to come some risks. If you fail to pay your instant auto title loan as promised, the lender can repossess your car. If this happens, some companies add the cost of swapping the locks, getting new keys, and towing to the amount you owe. Your car eventually will be auctioned if you do not pay up everything you owe.
High Interest Rates are Common
While personal bank loans are tougher to qualify for, the interest rates are superior to the auto title loan rates available throughout the United States. According to Bankrate.com, the average APR on a car title loan was 300 percent in 2014. Rates will vary from state to state, and states like Arizona have laws capping the interest rates, which can help lessen the amount you’ll pay to borrow the money.
There are risks and rewards to instant auto title loans. Make sure you carefully read the terms and fine print and are able to keep your end of the deal. Paying back on time is essential.