By financen | May 8, 2016 - 3:34 pm - Posted in Loan, Title Loans

Title loans are one of the helpful means if you are looking for a short term loan. Here, the loan gets instantly approved and the borrower finds it as one of the best available option.

Title loan is secured to the vehicle as collateral, but you can still freely use the vehicle in the manner you want. Many lenders take the vehicle as collateral to back the loan repayment. It is important that the borrower has a clear title to the loan. He needs to produce valid documents proving that he owns the vehicle at the time of approval of the loan.

The processing time in title loans is very fast. In regular loans, the borrowers have to wait for several days for the approval. In title loans, the borrower can know the status within 30 to 45 minutes after the application is filed. People with bad credit who are disheartened because of refusals in the application process will find title loans different. No credit check is required in Title loans Texas.  You can still get approved for title loan even if you have county court judgment, individual voluntary arrangement etc. by being regular in the loan repayments, you can have a sizeable positive effect on the credit status.Title loan

While applying for the title loan, the borrower needs to present his pay stub, a couple of personal references and a valid address proof. Once these documents are submitted, the loan can be sanctioned for use.

Title loans are best used for short term because of high interest rate. Hence the term of repayment should be for a month or two.

Due to unavoidable circumstances, if you are not able to pay the title loan in the month it is due, you will have to pay the double amount in the subsequent month, plus the interest of the first month. This is because interest in the second month costs equal to the actual amount.

It is advised to use title loans only during emergencies and not to get trapped in it. If for some reasons, the borrower fails to pay the title loan in the month it is due, then he has to pay double in the subsequent month or else he will just pay the interest. This means that the principal will be carried over to the next month and the borrower has to pay interest equal to the principal. This way it becomes a vicious cycle making it difficult for the borrower to come out of this trap.

Before taking the title loan, it is important to plan repayments and make sure to pay it on time to avoid the late fees. The rate of interest is very high so one should keep this factor in mind.

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