There are many different types of short-term loans that you can take advantage of in order to get out of a financial rough spot. We all have times when we’re tight on cash and many of us have less than desirable credit scores these days. This is when short-term loans can be helpful. Today, we want to share another loan option with you: the car title loan.
A car title loan is simply a loan where you provide your car title as collateral for the loan. Interest rates may be higher than a traditional loan, because lenders usually don’t check your credit, nor do they perform extensive income verification. For many, this is the appeal of the loan. If your stats aren’t great on paper, but you will be able to pay the money back on time, this might be the option for you.
Like a payday loan, car title loans are only meant for financial emergencies. After all, this is your car we are talking about! The relative daily importance of your car might vary depending on where you live and what you do for a living. For instance, if you live in Los Angeles and you need your car to drive to the office every day, you may not want to borrow against it. On the other hand, if you live in New York and take the subway to work most days, borrowing against your car may not be such a big risk. Even if you have the latter situation, you still only want to take out a car title loan if you are truly in a financial crisis.
If you are going to default on your rent check, or you have a sudden medical emergency, and you don’t have the credit to get a traditional loan, a car title loan from a trustworthy lender may be the best option for you. As we mentioned before, be sure evaluate your priorities and needs before taking out one of these loans. No concert ticket, Louis Vuitton bag or last-minute trip to Vegas can justify risking your wheels.