If you are facing a cash emergency, chances are good you are looking for ways to get a loan as quickly and easily as you can. If you are a resident of the Lone Star state, there are some options available to you that can help you get hundreds or even thousands of dollars within a matter of hours. In fact, car title loans in Houston can be worth as much as $15,000. Unlock the equity in your auto with a same day car title loan in Texas.
One of the most popular options for those who need cash fast is to take out a car title loan. The reason car title loans are so popular is because most lenders can approve qualified applicants within one hour of them applying. Another reason why they are so popular is because while most personal loans require extensive credit score and credit history checks, car title loans do nothing of the sort.
The reason why car title loans can be issued without lenders checking their borrowers’ is because car title loans are based fully off the value of the borrower’s car and the equity they have in their car.
So, how to car title loans work? It’s actually quite simple.
Basically, if you own a car and have a lien-free title on that car, you can take your car and title to a car title lender. Car title loans are readily available both at in-store lenders and online. While online car title loans are incredibly easy too apply for, because you can undergo the entire process from start to finish online, in-store lenders are typically known for being able to get your money to you just a bit quicker.
Either way, you can expect to have your loan in hand within 24 hours of the time you apply.
Because car title loans are tied to the value of your car, your car will typically have to be worth at least $2,500 to qualify. Just because your car is worth at least $2,500, however, you should not expect to get a loan equal to that amount. Typically, borrowers are offered loans that are anywhere between 30 percent and 50 percent of their vehicle. The reason for that makes perfect sense once it is explained. Lenders typically look at the KBB or Kelley Blue Book value and lend a percentage of that.
The reason for the percentage also has to do with the fact that car title loans are secured loans. Since your loan is tied to the value of your car, if you are unable to pay back your loan after your payment term (payment terms for car title loans typically last between 14 days and 30 days), your lender will have the option to repossess your car. Your lender will repossess your car if you don’t pay off your loan so that they can recoup their losses. That is why lenders offer loans that are worth 30 percent to 50 percent of your car’s actual value. If they have to repossess and sell you car, they aren’t going to want to spend their valuable time searching for a buyer who is willing to pay full price. They are going to want to sell your car as quickly as possible so that they can be made financially whole again.
Because car title loans are secured loans, they can be a fairly risky option if you do not feel you will be able to pay back your loan in time. Before you apply, you should evaluate your finances, your income, what you need the loan for, and how long it will take you to pay it off plus interest before you take out your loan.
If you find that you may not be able to pay off your loan by the end of your term, you may want to avoid taking out car title loans in Houston. If you do not find out that you won’t be able to pay back your loan until you are already in the midst of borrowing your car title loan, make sure to contact your lender as soon as possible and ask them to roll over your loan term. Rolling over your loan term will give you a lot more time to pay off your loan, but be warned, it will also come with another interest fee.
Interest rates for car title loans are quite expensive. The national average rate for car title loans across the United States is believed to be approximately 25 percent. That means that if you take out a car title loan worth $1,000, you will owe at least $1,250 by the end of your first term. If you have to roll over that loan for a year, your loan’s annual percentage rate will be 300 percent. That means that you would owe $3,000 in interest fees alone if you originally took out a $1,000 loan. That’s quite a hefty price to pay for such a small loan.
If you are interested in taking out a car title loan, you will need the following to qualify.
On top of that, if you are applying in-store, you will likely be asked to have your car inspected in person. If you are applying online, your lender will ask you to provide either pictures or videos so that they can evaluate the value of your car.
After that, you should be good to go! Car title loans are famously known for being incredibly easy to get. They are also infamously known for being fairly hard to get rid of. High interest rates can make it necessary to roll-over you loan. That can lead to a cycle of debt that can get pretty dangerous.
Still though, if you are confident in your ability to responsibly borrow and pay back your loan, a car title loan can be a fantastic help.