Title Loan Q & A
Q. What should title loan cash be used for? Are there any rules? I am looking at title loans in Mississippi.
A. Good question, so I will try to give you a good answer! A title loan is a short-term emergency loan, by my definition, so what you consider an “emergency” may vary from what I, or other borrowers, consider an emergency. From what I have read over the years, traditional uses for title loan cash is for medical bills, unexpected home repairs, missed rent or mortgage payments, etc. Other uses I’ve seen have included opportunities to purchase items at a great discount, veterinary expenses, and even tattoo removal. The reasons people get title loans is as diverse as the ways they spend their cash, so to answer your question, title loan cash can be used for anything a borrower considers important. As to whether or not there are any “rules” in regard to how you spend your title loan cash, there are the terms of your loan, for a start. Be sure to read and understand the terms of your title loan and, most importantly, have a plan for repayment. Remember, no one ever plans to fail, they only fail to plan. Thanks for the question, and have a great Fourth of July!
Q. I just turned 17 and I own my car. I want to free up some cash to get an apartment of my own in Chicago, so can I get a title loan on my car?
A. First of all, congratulations on owning your own car. that is quite an accomplishment for a person your age. Next to a home, a vehicle is the largest purchase the average person will make, so you are ahead of the curve. As a 17 year old, you are still considered a minor in the eyes of the law (in most regards) and unfortunately you are unable to enter into a binding legal contract, which a title loan most certainly is. I am also assuming that there is another name on the vehicle title beside yours, a co-signer. If that is the case, both people on the title must sign for a title loan. If not, when you are 18, you can get a title loan as easilly as anyone else. In the mean time, you have almost a year to save for your apartment, so you may not even need a title loan by then. It sounds like you are well on the path to becoming a responsible young adult, so good luck and thanks for a great question.
Auto Pawn vs. Title Loan
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Q. I have looked for a title loan in my home state of Georgia, and all I keep finding is auto pawn. What is an auto pawn and how is it different from a title loan?
A. Thanks for such a good question that has come up more and more in certain states. In Alabama and Georgia, the laws there require title loan lenders to call a title loan an “auto pawn.” These two types of loans are identical except for the name. All of the approved auto pawn providers that this blog endorses operate like traditional title loans operations, not to be confused with some auto pawn providers that actually keep the borrowers vehicle in an impound lot until the loan is repaid. It never made sense to me to keep someone’s vehicle, usually their primary transportation to and from work, locked away during the course of a title loan or auto pawn. Be sure to ask all the specifics with an auto pawn, the same as any other type of short-term loan. If you want to visit an approved Auto Pawn Lender in Georgia, click here. For an approved Auto Pawn Lender in Alabama, click here. Thanks for the great question!
Approved Title Loan Lenders Additions
After a fairly long review of several groups of new title loan lenders that sent their info to us, we have finally approved a new batch of “How Title Loans Work Approved Title Loan Lenders.” The review confirms the criteria we have established as industry professionals to ensure consumers are treated fairly by title loan lenders. This group of title loan lenders are pretty much located almost everywhere in America, so have a look below to find a title loan near you.
Title Loans of Alabama
Title Loans of Arizona
Title Loans of California
Title Loans of Deleware
Title Loans of Georgia
Title Loans of Idaho
Title Loans of Illinios
Title Loans of Louisiana
Title Loans of Mississippi
Title Loans of Missouri
Title Loans of Montana
Title Loans of New Hampshire
Title Loans of Nevada
Title Loans of NewMexico
Title Loans of Oregon
Title Loans of South Carolina
Title Loans of South Dakota
Title Loans of Tennessee
Title Loans of Texas
Title Loans of Utah
Title Loans of Virginia
Title Loans of Wisconsin
Auto Equity Loans
With many people “upside down” in their homes these days, home equity loans are pretty much impossible to qualify for for most borrowers, and just as Americans grow more reliant on credit cards to help pay monthly bills, they’re being hit with a one-two punch: Card companies are reducing borrowing limits for tens of thousands of consumers, which then can lead to lower credit scores. This means they are reducing the maximum amount of credit extended to an individual, along with boosting card interest rates and allowing fewer balance transfers. Banks and other card lenders are trying to better protect themselves from more massive losses like those they’ve seen from sub prime mortgages. Consumers facing this predicament might not even know their credit has been damaged until they apply for a loan or another credit card, and they are denied because their credit score has dropped due to their new debt to income ratio. While banks and credit card companies scramble to protect themselves from the very people who helped them make their fortunes, other companies are realizing the opportunity they have to find their niche in the world of finance by helping consumers find and access their hidden equity.
Everything we were taught about equity has changed. Fundamentally, the concept is still the same-equity is the money value of a property or of an interest in a property in excess of claims or liens against it. So when everyone’s home value dropped these past couple years, all the potential borrowing power disappeared for many homeowners. So how are these new generation lenders making it all work in this economy? They have allowed borrowers to tap in to an often forgotten source of equity-their vehicles. It isn’t the first thing that comes to mind when you think of a source of collateral for a loan, but think about it. Next to a home, what is usually the next biggest ticket item a person owns? A vehicle. Overall, there were an estimated 250,851,833 registered passenger vehicles in the United States according to a 2006 DOT study. In California alone, as of Dec. 31, 2002, there were 22,605,810 licensed drivers in the state and 20,665,415 registered autos. Just about every licensed driver in California owns a car. That is a lot of borrowing power people are driving around every day.
Auto equity is simple for consumers to access and the process of getting an auto equity loan is surprisingly simple. Lenders offer equity loans against the value of the vehicle. Since the loan is based solely on the value of the vehicle, no credit check is required. All lending is direct to the consumer and there are no financial institutions or brokers involved in the entire process. The terms of a California auto equity loan are simple and easy to understand, and auto equity loans are easily extendable at the borrowers discretion.Once a potential borrower is pre-qualified for an auto equity loan, most receive their auto equity loan funds in as little as fifteen minutes. To further aid consumers in the application process, all pre-qualifying can be done from the privacy and comfort of home either by phone or online. It has never been easier to free up hidden cash to take care of bills, rent or mortgage payments, vacations-almost anything you care to imagine. To learn more about auto equity loans and take advantage of these lending programs, go to www.rpmlenders.com
Title Loan Q & A - Part 2
Q. What kind of vehicles can you get a title loan on? I have a motorcycle but no car, and I’m interested in a title loan. Any ideas?
A. Well, I have good news and bad news. The good news is, If you live in California, you’re in luck. Title loan lenders in California will make title loans on many vehicles title loan lenders in other states will not, like motorcycles, ATVs, boats, jet skis, RVs and classic cars.
The bad news is, if you’re not in California, you can only get a title loan on a car or truck-and there are some other rules you might not know about. Here’s the deal. First of all, you need to own your car outright and be in possession of the title (pink slip). There can also be no liens on the vehicle. Secondly, the car must be in good working order. So you can’t tow a broken down heap to the parking lot of your local title loan lender and ask for a title loan. Also, when you apply for a title loan, part of the process is a vehicle inspection to make sure it is in good shape and good running order. This inspection along with the Kelley Blue Book value of the vehicle determine the amount of your title loan limit. Thirdly, if your car is worth $10,000 don’t expect to get that same amount as a title loan. The usual amount is about 40 to 60 percent of the vehicle’s value. And last but not least, your vehicle can be no older than 10 years, so keep that in mind also. I hope this has cleared up any confusion you may have had, and thanks for the question. Good luck!
Title Loan Interest Rates-Too High?
Today’s question touches on what I consider a very interesting aspect of the lending industry at large-interest rates. Here’s the question from a reader.
Q. Title Loans seem to have high interest rates. Is it fair to the consumer that these companies can charge whatever rates they want?
A. Good question, but I think that your facts may be a little bit off. First off, interest rates on a title loan are higher than a traditional personal or home loan, but I’ll address that in just a moment.
Title Loan companies are not allowed to charge “whatever rates they want.” The interest rates a title loan company can charge are dictated by the laws of each state they operate in, and they can vary dramatically. It is the responsibility of the borrower to become educated about not only title loan interest rates, but interest rates in general. The rate on a title loan is on average 25% for the term of the title loan, which is usually about a month. So if you borrow $500 from a title loan company, the interest you pay will be $125. Sounds like a lot, but compared to car and home loans, the amount is minuscule. Let’s face it, people who loan money are in business to make money. If you buy a house for $200,000 and take out a fixed 30 year mortgage for the same amount, by the time you own that home you will have paid the following in interest.
Loan Balance: $200,000.00
Loan Interest Rate: 5.00%
Loan Fees: 0.00%
Loan Term: 30 years
Monthly Loan Payment: $1,073.64
Number of Payments: 361
Cumulative Payments: $386,513.11
Total Interest Paid: $186,513.11
See, you are paying almost the initial cost of the house in just interest! Sobering thought, and it also makes a title loan seem like a much better deal than the banks would have you believe. Here’s the real deal. Title loan lenders are a business and they want to make money loaning people emergency cash for short periods of time, so they only have a brief window to make a small fraction of the money a bank makes over the course of 30 years. The only difference is, a title loan only costs you about 25% of your loan amount in interest, while with a “traditional” fixed-rate home loan, you are paying over 93% of the principal amount in interest alone.
Another point that needs to be made is that to get a “traditional” bank loan of any sort, credit is going to be a big issue for the borrower. A title loan is based solely on the value of the vehicle you bring to the lender. Therefore, title loans are more readily available to “problem borrowers”, as banks like to refer to them. That simply means people with less than perfect credit, and in this economy there seems to be more and more people falling in to this category. There is never a credit check for a title loan at an approved title loan lender, so factor that in to the equation as well.
Lastly, a title loan can be obtained in a matter of minutes, not days, so expedience is another factor in considering the cost of a title loan. When time is of the essence, a title loan will always beat a traditional loan because they can lend cash directly to the borrower. Speed and convenience are something else to factor when considering a title loan.
So in closing, I believe that for the type of service they provide to the public, title loan interest rates are about where they need to be for the businesses to remain viable. Thanks for the question, and we’ll talk to you all again real soon.
Are Title Loans A Bad Idea?
Q. Are Title Loans A Bad Idea? My friend said her little brother lost a car to a title loan lender when he fell behind on the payments.
A. This is another question I get a lot from audience members at my speaking engagements. I feel like the answer is not all encompassing, so let me start by explaining what a title loan is meant to be used for. It is really a short-term emergency loan for people who need cash fast for whatever emergency they might have. The idea is to get your title loan cash, fix the emergency problem at hand, then repay your title loan balance as soon as possible, or pay the interest and roll the title loan over for another term. That is the key to responsibly using a title loan, having a plan to repay it. People who use unscrupulous title loan lenders can find themselves in financial trouble rather quickly when the interest starts to pile up, and eventually they will lose their vehicle. This is the same scenario as someone losing their house to foreclosure if they don’t pay the bank. So is a title loan a bad idea? For most people, no. Thousands of people have successfully used title loans to stave off an emergency cash situation, then paid their title loan off in short while. As a matter of fact, most title loan customers with our approved title loan lenders end up being return customers. It’s the people without either a plan or common sense (or both) that you end up hearing the title loan horror stories about. So in conclusion, let me reiterate, title loans are a good idea for most people. Just be sure you have a realistic plan for repayment and a quality title loan lender on your side. Good luck!
What Do I Need To Get A Title Loan?
This is a question I get in our inbox a lot, so I’m going to address this one right now before the weekend. Obviously, you need to own a vehicle. Some places will make title loans on motorcycles and RVs, but predominately, title loan lenders will make title loans on cars and trucks. So you have a vehicle-you also need to own it outright. That means it is completely paid off and you possess the title, or pink slip if you prefer. This document is proof that you are the owner of the vehicle and that there are no liens on it. A lien is a legal claim or a “hold” on some type of property, whether personal or real property, making it collateral against monies or services owed to another person or entity. A lien usually exists in situations like second mortgages, loans against a vehicle title, or money loaned against any other substantial item owned by a borrower. It may keep the borrower from selling the property, or at least keep him or her from transferring title to the property. So is plain English, no one can have any fingers in the pie, the car has to be yours outright. OK, so you have the car and the title - all you need now is a Valid Picture ID. This can be a state issued drivers license, a state issued ID, a passport, or a Military ID. These rules vary from state to state, but these are the usual forms of ID accepted. And that is pretty much it. Title Loans are really easy to qualify for and they can be very usefull when used responsibly with a repayment plan. See you on Monday.
Title Loan Q & A
