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Four Important Facts About Auto Title Loans

June 18, 2012 | Comments: 0 | Views: 162

Selecting a debt instrument among the many available is no easy choice. This is especially true for those who are considering going for auto title loans because of the relatively novel nature of the debt market. The key to making the right decision is to collect as much relevant information as possible and then use it to compare the different options you have. Following are some questions that most borrowers ask about it when pondering over the choices they have.

What is the time period of an auto title loan? Title loans are short term. Hence, borrowers are expected to pay back within 36 months. This term however can be shortened or extended upon the borrower's request. It must be noted that while shortening of the payback time does not require borrowers to pay a penalty, extending the period leads to rise in the interest rate with every passing month. The increase in interest rate occurs to compensate the diminishing value of the vehicle that was used as collateral.

What makes an auto title loan preferable compared to a bank loan? Several factors make title loans preferable compared to bank loans. Perhaps the most important one is the lack of any credit score requirement. Yes, while banks and other high street lending institutions use your credit score to judge you as a borrower and to decide the interest rate you will be offered, lenders of title do not.

Another benefit of going for an auto is the speed at which it applications are processed and cash loans are handed out. Thirdly and equally importantly, unlike other secured loans offered by banks, the collateral required by lenders of it, is as low as $4,000 (in the form of a vehicle).

What makes an auto title loan preferable compared to a pawn loan? The only benefit of choosing a pawn loan over it is that your credit score will remain unscathed if you default on a pawn loan while the same will be negatively affected if you default. This benefit can be enjoyed by those who end up defaulting. For people like you who have all the intention of paying back, It is preferable because unlike lenders of pawn loans, lenders of it will allow you to keep using the vehicle that you will use as collateral.

How is a title loan better than a Payday loan? The main difference between a payday loan and an auto is that of the amount borrowed to you. Since a payday loan is based on your monthly income, the amount offered is relatively small that has been backed by your vehicle. Even if the worth of your vehicle is the same as your monthly income, auto title lenders will lend you more than payday lenders do.

A Car Title Loan.Com provides great rates on car title loans and auto title loans, collateral loans, and pink slip loans. Get cash in 1 Hour. Bad credit is not a problem. Keep and drive your car while you pay back the loan. You keep the cash and the car; we keep the title; it's that simple. Serving CA, AZ, and NM since 1994. Apply online or call 1-888-744-8953. or visit us at

Source: EzineArticles
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