If you find yourself in a position where you need cash quickly, a personal loan allows you to borrow the money you need more affordably than using a credit card. There are several alternatives available, one being a car title loan.
Car title loans are a great solution that isn’t as likely to harm your credit or put you in a cycle of debt. A title loan is a great way to take the value of your vehicle and turn it into cash that can be used for your expenses.
How Do Car Title Loans Work?
Taking out a loan from a bank or other financial institution can be classified as a secured or unsecured loan. A secured loan pledges an asset of significant value in case of default – this item is referred to as collateral. A car title loan uses your vehicle as collateral to secure your loan from a lender. Similar to all other kinds of loans, secured loans are paid back over an agreed-upon period.
An unsecured loan is when you borrow money without having any collateral attached to the loan. Unsecured loans can be more difficult to secure as there is a bigger risk to the lender. With collateral loans, more of the risk falls on the borrower since the lender can take possession of the asset if you default. For this reason, collateral loans can be easier to be approved and can be less expensive.
What Are the Benefits of Car Title Loans?
Car collateral loans are a legitimate and widely accepted form of loans. One main component that has changed over the years is that cash lenders don’t take your vehicle from you. Lenders do not want to acquire your vehicle, so the payment structure of car title loans is simple and easy.
Some of the benefits of choosing a car title loan include the following:
No Need for Credit or a Credit Check
If you have no credit, poor credit, or a debt ratio that doesn’t allow you to qualify for a loan, car title loans are a great alternative for you. As long as you meet the criteria for a car title loan, they are a great way to access money, even with bad credit.
You Get To Keep Your Car
One of the biggest incentives with a collateral loan is that you get to keep your vehicle. As long as you make your payments on time and don’t default, you will keep possession of your assets.
Flexibility To Pay Off Your Loan At Any Time
Car title loans have the flexibility to be paid off at any time and allow borrowers to avoid some of the interest. The majority of these kinds of loans are structured with longer payment terms to keep the payments manageable and smaller. However, the interest rates of a car title loan tend to be higher than that of a typical loan.
You Can Take Longer To Pay Off Your Loan
The payment terms of a collateral loan are structured to keep the payments affordable. The time it takes to pay back your loan is stretched out over a longer period of time in order to keep the payment smaller.
Depending on the car collateral lender you select, some will ensure you can make your payments by giving you the smallest payments available and the longest amount of time to pay it off.
What Can I Use for Collateral in a Secured Loan?
You don’t have to limit yourself to just your vehicle regarding what you can put up for collateral. According to the Government of Canada, depending on your province or territory, you can use other types of registered vehicles as collateral.
The potential includes:
- Motorcycles
- Boats
- Recreational Vehicles
- Camping Trailers
- ATVs
What Do I Need To Qualify For A Car Title Loan in Edmonton?
When it comes to understanding the requirements of a car title loan, there are a few documents you need to have. Depending on your lender, these can change as some may want more documentation.
The standard details and documents you must have at the beginning of the application include:
- Proof of income
- Bank statements
- Identification
- A car title
- Vehicle or asset pictures
- Contacts and personal details (Email address, employment details, proof of residency, etc.)
- References
The Best Car Title Loan Providers In Edmonton
If you’ve decided a car title loan is the best option for you, the next step is to contact a trusted, reliable
lender. Whether you have bad credit or a poor credit score, we are confident we can find a solution for your financial needs. At Cash Loans Alberta, we provide fast cash authorization for your convenience.
So contact us today to get an easy car loan application and approval!
