Applying for salvage title loans involves an application that will provide the lender with identifying information to ensure the borrower is qualified to receive the loan. Once the potential borrower fills out the application, the lender will assess the value of the vehicle. The consumer is required to give the lender the title to his or her vehicle in exchange for the short-term loan; however, the consumer is still able to drive the vehicle as long as the loan remains in good standing.
The loan amount offered depends upon the value of the automobile; however, the amount offered to the borrower will be lower than the actual value of the vehicle. This is to guarantee the loan company is able to sell the vehicle in the event of repossession and regain the money they loaned to the borrower as well as any or all of the interest owed. Consumers are responsible for borrowing only the amount they can afford to repay and are not required to accept the entire amount offered by the lender. If the borrower defaults on the loan, the lender has the legal right to repossess the vehicle and attempt to recover any financial losses.
Qualifications and Receiving the Loan
Qualifying for a quick title loan is easy. Consumers are required to be 18 years of age or older, own their vehicle and have a steady monthly income. Documents to support the address and contact information of the borrower are also required upon signing. These documents may include utility bills, phone bills or a rental agreement in the borrower’s name. Proof of insurance, a valid driver’s license and proof of income are also required documents that must be presented at the time of the loan. In addition, the auto loan lender will ask the potential borrower to supply a list of references that have the ability to verify details such as their relationship to the applicant and how long they have known him or her.
Repaying the Loan
Because auto title loans are short-term, repayment is typically extended for anywhere from 30 days to 1 year. If for any reason a payment is not able to be made on the date of repayment, contact the lender for an extension or to establish another date to pay. Late fees may apply; however, extending the loan and paying these late fees can ensure the borrower is able to keep his or her vehicle. The lender may place a limit on the number of times an auto title loan can be renewed before it enters into default.
The interest rates on short-term loans are typically higher than long-term loans. Before accepting a loan, borrowers should always factor in the amount of interest that will be included in the repayment. Although the interest on auto title loans may be a bit expensive, the interest rate for an same day car title loan offered by Auto Pawn is about half the amount of a typical payday loan or other alternative loans. In many cases, it is easier to repay a title loan compared to other short-term alternatives due to the length of repayment. Payday loans are expected to be repaid in full on the borrower’s next payday while the duration of an auto title loan can be much longer.