There are not very many options available when anyone is faced with emergency fund requirements. You may need this money to pay your medical bills, get your car repaired, for a special event or even to carry on. But you are not entertained at traditional lending institutions. So, you have no option than to face the private lending institutions but this is where your needs get fulfilled the most fasty when you opt for a Car Title Loan Toronto.
But a lot of people in Toronto know what these are and what are the benefits that come with it. Many conceive it as a risky venture and don’t want to indulge in lending against their car. But surprisingly, these offer best terms as compared to the traditional loans, are way more approachable and have very less risk. It is aptly said that one shouldn’t judge a book by its cover and same case with such title loans.
What Is A Car Title Loan?
An auto title loan is like any other personal loan. This is a type of secured personal loan that allows borrowers to borrow money and use their car title as collateral. This means that if borrowers fail to pay back the amount they borrowed, their vehicle will be possessed by the lending institution to recover the amount of loan but it happens only in the most extreme conditions. The lender will sell the vehicle when the borrower fails to pay the loan in full at the end of the loan term.
This type of loan costs a lot of money because it involves borrowing money at such high rates and also, as a result, putting your personal assets at risk. You can borrow money you need for different purposes, like to pay for a car repair, to buy household items, or even to go on vacation. If you have a title loan in Toronto, it’s important that you are fully informed about it and know how it works so you don’t get deceived by any untrustworthy private lender. Unfortunately the interest rates are usually quite high and borrowers should budget accordingly because if they can’t repay their loans in time, they’ll lose their car used as collateral.
How high the interest rate applicable on the car title loans will be is dependent on the state you reside in and how much you can borrow. Some states have laws set in place that limit how much interest rates can be. But many other states do not have such laws so the maximum interest rate can be higher. The greater amount a borrower borrows, the higher cost it will be to pay back their loan.
How Do Car Title Loans Work?
For those who need quick cash, an auto title loan can seem like a viable option. In order to apply, the borrower must have a vehicle worth at least as much as his or her intended loan. In most cases, borrowers must also be at least 18 years old and have a clear title to the car they’re using as collateral for the loan.
Before they can borrow money from a car title lender like Quick Cash Canada, borrowers must first sign over the title to their car to the lender as collateral for that loan. It is possible to get a car title loan in Toronto without providing any collateral, but the interest rate on that loan would be higher, which is why the majority of lenders want to use their vehicle as collateral.
What Are The Features Of A Car Title Loan?
1. Fast Approval
Compared to other loan types, a title loan is usually approved within a day. You can get money very quickly, without filling out lots of paperwork. You can get the amount of money that you are eligible for in less than a day. Also, You can go to any lender who offers such a loan and get the cash, all within a day. It is also very easy to get a loan. The approvals are so fast because information such as your credit score and income do not matter for this type of loan. Also, it does not affect your credit score because the loan is a secured loan, meaning it does not need your guarantor’s information.
2. No Credit Check
When you apply for a car title loan, you do not need to prove that you have any additional collateral or your income in order to get the money. There are no credit checks involved in getting a car pawn loan. As long as you have a car title of your own, you can use it as collateral. That means that despite not having an excellent credit history, you can still enjoy the benefits of having ready cash with this type of loan.
3. Keep Driving Your Car
As long as you are paying back your loan, you will continue to have use of the car. If you stop making good on your loans, the lender can possess the vehicle. This is the one that many people forget about. You keep your car on this type of loan. You can refinance your car at a later date. Also, You can always get money from dealers or private buyers. When you sell your vehicle through a dealer, the lender will take the cash and pay off your loan.
4. A Longer Term Of Payment
This is another advantage of a car title loan in Toronto is that you have a longer repayment period. The money you borrow from a title loan will have to be paid back for at least 4 years. Moreover, you can also pay off your loan early if you have enough money in the bank. Also, if you want to make extra cash, you can always sell the car and bring the difference to your loan. Due to its longer payment term, it is more flexible for the borrower and very accessible and convenient at the same time.
5. Cram Down Payment Plan
In order to get this loan, you do not have to put down a lot of money. It is not necessary for most borrowers to pay more than 10% of the borrowed amount as a down payment. Some of the private lenders do not demand a down payment at all, like Quick Cash Canada. However, the lower the down payment, the higher the interest rate will be. So you should consider whether you can afford to pay back such a high interest rate before applying for this type of loan.
6. No Prepayment Penalty
With most other loans, you will be charged interest for the penalty amount if you make early or excess payments. This also applies to a car pawn loan. But this type of loan has no prepayment penalty added to the amount you need to pay back. The payment is calculated according to the amount borrowed.
The Amount You Can Borrow
The amount you can borrow depends on the lender. Generally, car title loans let you borrow more than standard unsecured personal loans because borrowers are required to use their vehicle as collateral. Many lenders offer high loan amounts if they find your car valuable and your documents reliable.
So, without a doubt. Auto title loan is one solution for all your financial troubles and can be availed easily from private lenders. These are easily accessible and allow you to get high amounts as loan.