How Do Car Title Loans Work?
March 16, 2021 | Mason Roberts
With everything going on in the world at the moment, money might have taken its toll. Because of this, you may have seen title loans gaining more popularity among Americans which leaves you wondering "how do car title loans work?"
If this sounds like you, you're in the right place. Here, we are going to discuss everything you should know about car title loans.
What Are Car Title Loans?
Car title loans, sometimes called title loans or auto title loans, are a short-term financing solution that allows you to borrow a lump sum of money depending on the value of your vehicle.
For instance, with our Illinois Title Loans, Inc., you can receive up to $4,000 as long as the market value and condition of your car, van, or truck matches up.
How Do Car Title Loans Work Exactly?
Car title loans work by using the equity in your car. In other words, you need to have complete ownership of your vehicle to get one.
Generally speaking, the maximum loan amount will equate to between 35% and 50% of the total value of your vehicle. The FTC (Federal Trade Commission) reported that the average title loan amount is between $100 and $5,500 but some lenders do break this mold.
After a short application process (see ours below), you will hand your car title over to the lender. This doesn't mean that you have to give them your vehicle. Instead, you can continue to drive it freely. Some lenders will want to copy your keys or place a GPS tracking device into the vehicle to ensure you don't run off without repaying the loan.
The Advantages of Car Title Loans
Aside from the "how do car title loans work" question, you should be aware of some of the advantages that this loan type can bring. Take a look below to find out more.
1. Same-Day Cash
When an emergency strikes, you don't want to be running around like a headless chicken trying to scrape dollars together. Medical bills, home repairs, and urgent travel can cause a huge rift in your home life and financial environment. Fast title loans can change that.
With the convenience of online forms, you can have the money you need in as little as half an hour!
2. You Can Keep Your Car
Contrary to what your friends might lead you to believe, you can still drive your car while you're paying off the loan. We mentioned this in the “How do car title loans work” section.
3. Your Credit Score is Not a Factor
Whether you have good credit, bad credit, or no credit, your credit score is not a factor in determining your eligibility. It will also not impact your credit score either since we don't report to the credit bureaus.
4. Great Repayment Terms
Each repayment sum will be agreed upon before signing the contract. This allows you to budget effectively.
5. Short Application Process
Unlike traditional bank loans, you don't have to wait weeks or months for your application to be processed.
Try Illinois Title Loans Today
Now that you know the basics of how car title loans work and their advantages, it's the perfect time to look at how our Illinois title loans near me can help you.
Over the years, we have streamlined our process to ensure nothing but the speediest, easiest loan program around. Just follow this step-by-step guide to apply for one of our Illinois title loans:
- Go to our Home Page.
- Navigate to the short online request form and fill it in. We ask for basic information only so expect it to take roughly 5 minutes.
- After you've submitted the form, a loan specialist from your closest storefront will give you a call.
- During the conversation, they will tell you about the rest of the process. Make sure you ask any questions at this stage.
- Bring your state-issued ID card, your vehicle, and your lien-free vehicle title to your closest Illinois Title Loans, Inc. shop.
- Wait while a loan representative inspects your vehicle and evaluates your paperwork.
- If you are approved, you will receive the amount you qualify for the very same day!
Contact Illinois Title Loans for More Information
After everything you've just learned you are more than capable of answering your, "how do car title loans work?" question. Don't be afraid to get in touch to start the process if you feel this loan type would be a good fit.