If you are in need of fast cash and want to borrow money, you may come across the idea of a car title loan. A car title loan lets you borrow cash by using the equity in your vehicle as collateral. In other words, you can tap into the money you have tied up in your car and use it to secure a loan that will help you to meet your immediate financial obligations.
When many people hear about a car title loan, they have a lot of misconceptions about what is actually going to be involved in borrowing money this way. There is a lot of misinformation out there and it is essential that you separate fact from fiction and cut through the misinformation to make a truly informed choice about whether a car title loan is the right choice for you or not.
Title Loan Myths
Here are a few of the most common myths and misconceptions about car title loans so you can have a better understanding of whether this type of lending is a good choice for you to get help meeting your financial needs.
- Myth: You need to have good credit to get a car title loan
As Bankrate.com, points out, having good credit is really important when applying for most types of loans. If you have bad credit, a lot of lenders are going to be unwilling to lend you any money, leaving you in a bad spot when you need to borrow some cash.
Fortunately, car title loans are really different than other loans when it comes to the emphasis that is put on your credit score. Despite what you may believe about securing a car title loan, you do not have to have a good credit score to borrow money. You can borrow money on a car title loan even if you do not have a credit history and even if you have a track record of bad credit and not making your payments on time.
In fact, one of the primary reasons so many people turn to title loans is because a title loan makes it possible to borrow money when you would otherwise not be able to do so.
- Myth: You have to give up your car in order to take a car title loan
The reality is that you can continue to drive your car for the entire duration of the time that you have an outstanding balance on a title loan. As long as you are living up to the terms of the loan, there is no way that you are going to be separated from your vehicle at any time as a result of having a car title loan. This makes it possible for you to use the car to help you get money without having to give up the vehicle or compromise your ability to drive to work or to fulfill family obligations.
- Myth: Car title loan lenders want to take your vehicle
Some people believe that a lender who gives a car title loan is hoping that the debtor will default so that the car can be taken. The reality is that this could not be further from the truth. Car title lenders benefit when you pay your bills on time and the lender doesn't have to go through the hassle of trying to collect from you. Car title loan companies don't want to deal with legal costs and they don't want to own cars that they end up having to sell, so they will try to reduce the risk of this happening. Car title loan companies try to make sure that they don't end up owning your vehicle by explaining the terms and the requirements of the loan to you carefully before you borrow money.
- Car title loans are hard to pay back
This is another common myth and many people believe that they'll have a difficult time paying back the loan. The reality is that you can have a deep understanding of the payment terms before you enter into the transaction so you can decide if you have the money to repay the loan or not. Furthermore, you often have a pretty long time to repay the car title loan so you have the opportunity to save up money and try to get back on your feet financially.
- Car title loan companies are unfair to borrowers
The reality is that you can find a car title loan company that cares about the people who are borrowing money and that has a long track record of helping customers out of tough financial spots. Visit LoanSource.com today to find the right car title loan company that can meet your needs.