If you are a resident of the state of California, chances are pretty good that you are facing some kind of financial pressure. That pressure can be taken to the next level and become a full-on crisis if you or a loved one is faced with unexpected housing expenses, health care fees, car repairs, or similarly unexpected emergencies.
These kinds of emergencies can require you to get money as quickly as possible, but getting an unsecured personal loan from a bank or other financial institution can be tough, especially if your credit score isn’t great. On top of that, the paperwork needed and the hoops you may need to jump through may make the time frame of getting such a loan untenable to your current situation.
One option that is available to you as long as you own your vehicle is to take out a car title loan.
Car title loans are specifically designed for the types of situations that require money as quickly and as easily as possible. The equity of your vehicle is used to determine how large of a loan you can get. These types of loans are far less restrictive when it comes to your credit history compared to traditional personal loans. In fact. Most car title lenders require no credit check whatsoever. See more here to find yourself a car title loan in California.
If you are thinking about taking out a car title loan in California, here are some facts to consider:
Qualifying for a title loan is easy
Title loan requirements are famously very minimal when compared to other types of loans. Less paperwork and personal information to divulge means that they can take minutes to apply and get approved for.
Whether you have a car, an SUV, a boat, an RV, a motorcycle, or a truck, your vehicle can be used as valuable collateral in a title loan.
All you need in order to take out a title loan in California is your title, a state issued ID, and proof of payment. It’s that easy!
It will be harder with low income, but not impossible
Of course having low income makes it harder to take out a title loan because lenders want to know that you are able to repay the loan by the end of your repayment term. That does not mean it’s impossible though. Also, consider the fact that things like unemployment, pension, worker’s comp, social security, and even inheritance can be used as a proof of income to secure a title loan.
Your loan is being used as collateral – that means you could lose it
When it comes to secured loans, the security that is being used is called collateral and that means that if you fail to repay your loan by the end of the repayment term, you will risk losing your car to repossession.
The reason why title lenders repossess a car if you default on the loan is because they are trying to recoup the money they have lost by lending to you.
An easy way to avoid this unhappy outcome is by simply paying your loan back by the end of your repayment term.
You get to keep driving your car
When you take out a title loan in the state of California, you may think that you will have to trade in your keys during the life of your loan. Luckily, that is not the case at all.
With car title loans, you can continue driving your car as usual throughout the entire life of your loan.
As long as you make your payments for the loan on time, you will not have to worry about how you are going to get from point A to point B throughout your entire loan.
Title loans come with higher interest rates
While some secured loans are known for having smaller interest rates, car title loans actually have somewhat higher rates than the norm. The reason why is because the short duration of the loan (can be as short as two weeks to a month), paired with the fact that lending to people with low credit scores is considered a high financial risk, leads lenders to have to charge a higher interest rate.
In fact, title loans are known to come with interest rates as high as 25 percent, or an annual percentage rate of 300 percent.
You can get quite a lot of cash in the state of California
In many states, car title lenders will offer you loans that are just a few hundred dollars based on the value of your loan. That’s quite a lot of risk for such a small amount of money. In the state of California, however, state lawmakers have made sure that those who borrow title loans are going to get their money’s worth.
In California, the smallest amount that title lenders can offer their borrowers is $2600. Of course, your car will have to hold enough value to get approved for that amount, but just knowing that approval means a fairly high amount of money is quite a good thing to be able to hang your hat on.
You don’t have to panic if you can’t pay back on time
Of course there’s a certain amount of anxiety that comes with using your car as collateral in a loan. That panic is going to only grow greater for you. Luckily, just because you can’t pay your loan back on time it doesn’t mean you have to panic right now.
The first thing you should do when you think you may not be able to pay it off in time is to contact your lender right away. While a higher or increased interest rate may have to be established, title lenders in California are often happy to negotiate so that they can get their money back and you do not have to lose your car.
Regardless, it is always a good idea to have a plan in place to pay back your loan as quickly as possible.