8 Secrets to Understand about Car Title Pawns
January 14, 2017
Car title pawns use your vehicle as collateral in exchange for quick cash. A title pawn provides you with quick and simple alternative whenever you are in a financial problem. However, there are some basics you need to know whenever you apply for a pawn loan to avoid surprises.
Car title pawns are common
Title loans are common because most people find themselves locked out of conventional borrowing due to a number of issues. Credit cards have become harder to get, lines of credit have vanished, and many regulatory bodies have introduced strict rules to traditional lenders.
The loan amount depends on the value of the car
Once you apply for a title loan, the lender will send a representative to establish the value of the car. The lender will then calculate the loan amount based on the valuation. The amount of loan usually does not exceed 25 percent of the total value of the car.
Short repayment period
The repayment period for a car title pawn should do not exceed 30 days. In most cases, borrowers pay earlier. However, there are certain circumstances where the borrower might be prompted to request for an adjustment. In this case, the period will depend on the agreement between the borrower and the lender.
The interest rates are affordable
Title pawn dealers charge slightly higher but affordable interests rates than the normal loans. The interest rates range from 25 to 30 percent for a 30-day loan. However, there are some dealers who charge as high as 50 percent for some loans.
It takes minutes to hours to get a title pawn
People like title pawns because they take a short time to process. The loan can even take 10 minutes provided the borrower is willing to produce the title of the car.
You can still use your car
Car title loan dealers are only interested in the title of the car but not the vehicle itself. You will have to bind the car using the title. The lender will only have full possession of the car if you fail to repay the loan as agreed.
No credit history
The lender does not have worry about your ability to repay the loan because he has the title of the car and can use it to recover the loan amount. This means that even those who have bad credit histories can qualify for the loan.
Title pawns are regulated well in most states
As a result of increasing incidences concerning dealers who are exploiting people, many states have come up with a set of guidelines to tame such lenders. Today, pawn lenders must show that they have the ethics and the right personality before they get a permit to operate in a particular area.