How Does Title Loan Work?
There are various types of loans available to the people and one of the best loan available for students is title loan. In this type of loan, you will not need to show any other proof to avail this loan. The process of getting this loan is very simple and the loan amount will be availed within a few hours.
What is a title loan?
A title loan is a personal loan for which the car or bike serves as security. You can use this car or bike for any purpose without worrying about the payment.
Advantages of this loan:
1. Easy to avail: The process of applying for this loan is quite easy. You don’t need to have any document to apply for this loan. Once you complete the application form and submit the form, you will be able to borrow the money as soon as possible.
2. No need of collateral: You don’t have to provide any collateral while availing this loan. The repayment term of the loan is only for 1 month and it is repaid through EMI.
3. Repayment: The maximum repayment period is 1 year and the borrower is required to pay the interest every month along with the principal.
4. No pre-payment penalty: This is one of the main reasons why people go for this loan. They can repay the loan before the time of the repayment and the loan company will not charge them with any kind of penalty.
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5. No processing fee: You will not have to pay any processing fee as the loan is availed by the banks.
6. No credit check: This loan is not considered as credit and it will not affect the credit score.
7. Minimum documents required: You only need to submit your Aadhaar card and an identity proof.
How Title Loans Works
The first question comes in our mind is how does title loan works? As the name suggests that is for loan against your car title. It is also known as car title loans. In case you want to get a loan against your vehicle’s title, then this is the only way.
Title loans have been in use for several years and have changed a lot with time. They were popular for getting a quick cash, but now the market is flooded with title loans companies. These days it is difficult to choose the best company for you. In fact, most of them charge high interest rates and even if you repay the loan within the time, still you will be charged penalty charges.
Now, there are two types of title loans, one is instant and another one is direct. The former is used when you are facing a financial emergency and you need money immediately. When you go for the direct title loan, you need to visit the bank branch and apply online.
There are certain rules that you need to fulfill to get the best deal. First of all you need to have a valid vehicle to use as collateral.
After you complete the application, the lender will confirm the information. If it matches, they will transfer the money directly into your account. But if the information doesn’t match, then they will check with the police. After verification, they will ask for ID proof and vehicle registration papers. Once everything is confirmed, they will transfer the loan amount into your account.
There are certain companies who will give you cash advance in an hour. But if it is not possible, then you will have to wait for a few days. You will have to pay the fees of title loans upfront and some companies might charge you a prepayment penalty.
In any case, title loans are one of the best options for getting fast cash. There is no hassle, no paperwork and no collateral required. You can get up to $5,000. However, the interest rate for these loans is higher than others.
In case of non-payment of the loan, you will have to face penalties. So, be careful while taking a loan.
Conclusion:
It is one of the best loans if you are a student and you don’t have any other option. It is not considered as a credit and the borrower does not need to submit any proof. The processing is very quick and you will be able to get the loan within a few hours.
