Many consumers find themselves in a situation where they need money quickly and the only asset they have is their vehicle. If this is your current financial position, you may be wondering if car collateral loans are available for your vehicle. To answer that question the first thing you need to do is determine if your vehicle meets the qualifications for any type of loan so you know what type of loan companies will be interested in funding. So, there are a lot of things you need to know before ascertaining whether you can have a loan on your vehicle or not.
What Is A Car Title Loan?
First of all, what is a car pawn loan? This is a type of loan that allows borrowers to borrow money against their vehicle’s title and use it for different financial requirements. Some of them are used by people who need money for unexpected financial emergencies, such as medical bills or an unforeseen credit card bill that cannot be paid through other avenues. However, most consumers use these loans to help pay off debts such as credit cards. A car pawn loan is a type of cash advance that helps you borrow money against your vehicle as collateral. This loan allows you to access some money as soon as 24 hours once the application process has been completed.
This type of loan has proved to be quite popular among those looking for some quick cash. This is because it is easy to set up and process through the online application. This makes it simple for borrowers to apply for the loan and get the money they need within a short period of time.
What Are The Requirements For Getting This Loan?
When you are looking to get a car loan, the most important thing you need to find is if your vehicle meets the requirements for this type of loan. Most of them require that you have a clear title in your name. Some loans also require that your vehicle is registered in the state where you are applying for the loan. However, there are some companies that will give out loans even if your vehicle does not have an active registration or insurance coverage. In this case, the vehicle title must still be posted in your name. In addition to that, you also need to make sure that your car is not a junk car. There are many companies who will give you a loan if your car is non-drivable because it has too many issues or you have a ruined title or something like that.
Documents Required To Get A Title Loan
In addition to the basic requirements mentioned above, there are also some other documents you need to have ready when applying for a car title loan. Some of them can be used as proof of residency and identification, and others need to be shown as proof that the vehicle is in your name and that you own it. The following documents are required:
- Proof of permanent residency in Canada.
- Proof of legal age.
- A vehicle that is not more than ten years old.
- A valid Canadian driver’s license.
- Proof of registration of car under your name.
- An all inclusive car insurance policy under your name.
These documents are used while the verification is being done as a part of the application and approval process. No private lender keeps these documents with themself for the duration of the loan.
What Are The Different Benefits Of A Car Title Loan?
Another question people are asking is whether they can get such a loan at all. The answer to this question is yes, but you need to know what you are getting into if you decide to have one. There are numerous benefits of getting a car title loan, like:
1. Fast Approvals
Applying for this loan is easy and it can be done quickly. It may take around 15 minutes to fill out the application and provide the information needed, but you can get your money right at your fingertips in a matter of a few hours. The loan approvals need very less formalities and the whole process of application and approvals takes hardly 24 hours. So, it is fast processing and enables fast approvals.
2. No Credit Checks Required
Another benefit of the car collateral loans are that you do not have to have excellent credit to get one. As long as you own the car, you have collateral for the loan, so there is no need for your lender to check your credit standing. Also, this loan does not require a cosigner or guarantor. This is because the loan is given on the basis of the value of the borrower’s car and not on the basis of their credit score.
3. High Approval Rates
The approval rate for this loan. is very high, and you can get approved even if you have a very bad credit history and even if you don’t have a stable source of income. This is because the lender only needs to look at your car and if your car is valuable enough to serve as collateral, then you can get financing for your current financial situation no matter how bad it may be. This is also the reason why this loan is considered the most approachable of all.
4. No Prepayment Penalty
Another good thing about these loans is that you don’t have to worry about any prepayment penalties. You can repay your loan in full any time you like, but if you do pay off the whole loan early, you will not be charged anything extra. So, you can easily make a large lump sum payment to the lender or can pay it off anytime that is convenient to you even before the end of the loan period.
5. Keep Driving Your Car
Another benefit of getting a car collateral loans is that the borrower doesn’t need to keep the car. The title of which is kept with the lender. Any private lender, like super Collateral Loans, keeps only the car title and the spare keys with them. Neither any other document nor the car is kept with them. So, the borrower can use the car while he has the loan and their convenience is not affected at all.
6. Friendly Terms And Conditions Of Loan
The car loans are much more friendly in regards to terms and conditions. There are no hidden charges or charges that are not explained. The loan companies provide very clear terms and conditions that are explained to you clearly before you take the loan. Rather, the terms are decided upon only after knowing your preference and priorities. It helps both parties to understand what they are getting into.
Qualification Criteria For Such Loan
The qualification criteria is very simple for a title loan. Only three things are required. The car must have a positive equity value. The car title is clear and the car being put as collateral should not be more than 10 years old. If these minimal requirements are satisfied, there is no chance that anyone will be denied a loan.
There are many instances when the borrower is looking for a loan but gets rejected because of a dented credit score or not enough equity in the asset. But such is not the case with a car pawn loan.