Four Reasons Why A Title Loan Is Your Best Choice If You Have Bad Credit
If you have bad credit and need to borrow money, you may quickly discover that the options available to you are both few and expensive. However, a title loan has many advantages to think about.
A longer period of financing
You may have seen advertisements for payday loans, and they are available to those with bad credit, but if you do some research, you will discover that these loans are usually for 30 days or less. There are no installments involved when paying them back; you make a single payment when the loan is due. A title loan can often be financed over a period of several months. This gives you more time to get back on your feet and pay off the loan.
Lower interest rates than other bad credit alternatives
Title loans usually have lower interest rates than other types of short-term loans for people with bad credit, and the reason is that they are secured by collateral. When a lender knows they can get their money back if a borrower defaults, this allows the lender to offer a lower interest rate. Without this security, lenders must charge customers more money to make up for the loans that are not paid back. This is plainly seen with payday loans.
You get to keep possession of your collateral
Although you are offering your car as security for the loan, the lender only keeps the title of the car. Unlike something of value you might give a pawn shop for a loan, with a title loan, you can drive your car and use it as you normally would. The lender keeps the title in case you are in default of the loan. That's what collateral is for, but the idea that a lender does not take possession of the car is something that is a great advantage to a working person.
You can still use your car as collateral without the title
People with bad credit often have few assets, but your car may be an important exception. And this is true even if the car is not paid off. It is possible with many title loan lenders to get a loan without your title. As long as your car is worth more than the balance of your car loan, some lenders will pay off the loan and then combine this amount with the additional amount you need to borrow. They will then have the title to your car until you pay off your loan.
If you need to borrow money and have a car, but do not have good credit, then the reasons listed above should help convince you that a title loan may be best for you.
For title loans, contact a company such as Flexible Finance.