Understanding the Basics of a Car Title Loan

Understanding the Basics of a Car Title Loan

Most people need to borrow money at some point or other. If you’re reading this, you must be thinking about taking one out yourself.

Here’s what you need to know about a Utah title loan.

What is a title loan?

In many of the American states, some form of loan like this is allowed. It is considered a secured loan, as the lender has something of yours they can take if you are unable to pay the loan back. The average amount borrowed through this type of loan is $1,000, but some loans can get you as much as $10,000, depending on the value of your car.

Do you need to leave the car with the lender?

No, you can drive your vehicle home with the cash you borrowed. This is what makes title loans attractive to borrowers. The lender will hold on to the hard copy of your vehicle title as your collateral.

Some lenders ask for a key duplicate, and there are also those that require installing a GPS tracker. Some lenders will install their remote engine immobilizer. These are devices for making repossession of the car easier, in case you don’t hold up your end of the bargain.

Do lenders perform a credit check?

Lenders vary, but another one of the key attractions of a title loan is that most lenders don’t ask about your credit situation. They may not even ask for proof of income. The title of the car is enough to secure the loan.

Can you pawn any car?

Lenders also vary in the make and model they allow, but they all require that you own the car and the title is free from any other lien.

Should you pay the entire loan plus interest within a month?

Some lenders only give out a loan that’s good for 30 days, by which time you should be able to settle the loan plus interest in one payment. Other lenders allow up to six months of payments divided into prearranged installments.

Title loans may not be for everyone, but if you need a considerable amount right now and you do own a vehicle in reasonably good condition, they may be a good option. As with any other loan, make sure to honor the agreement to avoid paying penalties or having your vehicle repossessed.