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REDDITTitle loans can provide you with options when you are facing an unexpected situation. They provide a simple solution to short-term cash flow issues when there may not be another option that works. A title loan is a loan that uses a vehicle as collateral. The borrower agrees to make payments and the lender has assurance that they will get paid. The borrower will be able to keep the car and use it throughout the life of the loan as long as the payments are made on time. Take a look at the following top five benefits of title loans.
1. They Offer Quick Access to Cash
A title loan provides borrowers with quick access to cash when they are in need. The application is simple and title loan companies often make a decision within an hour or two. They do not require a tremendous amount of paperwork the way that other loans might. In addition, the money is normally available the same day. The bottom line is that as long as a borrower has a job and a car, this is the quickest way to access cash for an unexpected bill or an emergency.
2. The Loan Is Not Based on a Credit Score
Title loans are not based on a credit score, and sometimes the lender won’t even check credit. The reason for this is that the loan is backed by the value of the vehicle. As long as a borrower has a job and a car with a clean title, most loans are approved. It is best if the car is worth more than the amount of the loan as this makes the process even easier.
3. The Borrower Can Still Use the Car
Although a vehicle is used as collateral in a title loan, the borrower will be able to keep the car and continue to use it as long as he or she makes regular payments on time. This is a huge benefit because borrowers will be able to take care of the unexpected expense and continue on as normal. As soon as the loan is paid, the lien on the title is released and the borrower can ask for another loan.
4. Payments Are Simple and Flexible
Title loans offer flexibility in that borrowers only need to borrow the money they need. People can borrow a little bit of money to get through the month or a larger sum for an unexpected bill. Some title loans can be paid back in a month and others might have a longer term. Title loan companies work with borrowers to set schedules that work best for them.
5. They Are More Affordable Than Cash Advances
Title loans are more affordable than cash advances and they offer the same quick and easy process. Because title loans are backed by collateral, they often have lower interest rates than cash advances. Cash advances carry higher interest rates because they are considered to be risky. A title loan is less risky because the loan is guaranteed by the value of the vehicle.
