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Your Guide To Loans For Titles: Why Worry About Loans When You Have A Car:
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A common misconception prevails that obtaining a loan might be a difficult and tedious procedure. For those people with a bad credit history and no present source of income, getting a loan does seem to be a farfetched. But if you have a working vehicle of your own, getting a loan might be easier than you expect. This process of lending is known as loans for title. But before, dwelling in the finer details and aspects of this type of loans, some of the generic common terms and their meanings that are often used in these contexts must be remembered.
Credit: Credit can be defined as a mutual or contractual agreement in which a party receives something of value, which must be returned to the other party after a certain time period, with or without increment added to the previous value.
Credit history: A copy of the previous records of borrowing and repaying of an individual or an organization.
Mortgage: Often, some real property of the creditor is kept as security by the debtor organization.
Collateral: Something that is pledged as a security for repayment of loan.
Credit Score: The credit worthiness of a person; usually measured on terms of his paying back his previous loans.
Credit Union: A nonprofit organization offering low interest loans.
Secured loan: Collateral or a mortgage is levied against the loan
Unsecured loan: No fixed assets are levied against the loan.
•What is loan for title?
A loan for title, also known as a car loan or a pink slip loan or an auto title loan is a type of secured loan. As every type of secured loan requires a mortgage, in this case, the vehicle belonging to the borrower acts as collateral.
After receiving the loan, the borrower needs to allow the lender to place a lien to the car title. It is only after the repayment of the loan, does the borrower receive the car title to himself.
•Requirements loan for title:
The requirements for this type of loan are nominal, not unlike other types of bad credit loans. The basic requirements are as follows:
f)The borrower should be above 18 years of age.
g)Proof of residence.
h)Proof of income.
i)A lien free car. Cars whose titles still belong to the bank cannot be used.
j)References and car insurances are required in some of the cases.
•Benefits of loan for title or car title loans:
d)No credit check is done in most case.
e)Most systems allow you to drive your car, in spite of the loan.
f)A quick cash delivery.
•Calculation of loan:
The worth and condition of the vehicle decides the amount to be loaned against it. Usually, 30-50% of the actual worth of the vehicle is paid to the borrower.
•Fine prints regarding loan for title:
Like all other bad credit loans, caution and scrutiny must be exercised before proceeding. It is imperative that one should be well versed about the laws regarding such loans.
Transactions should be made with reputable organizations.
Alternative options must be checked.
The credit score should be improved.
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