You can use your car title as collateral for a personal loan if there are no other options of raising cash in emergency situations, and you do not want to sell the car. Many people are not comfortable with this and arrangement but it is the best option if you do not want to sell your car and you need cash.
Essentially, there are two types of car title loans. The first option is quite similar to a payday loan. There are no credit score checks or any debt-to-income ratio tests. As long as you have a car, you can apply for this loan.
The other option is when you use the owership car as a collateral to get the loan. This is a secured personal loan you can get from a bank, credit union you are a member of or any other finance company which your a comfortable working with.
Here are 5 tips to use when you want to use your car title as collateral for such loans.
1. Go to your local bank and ask if they will give a secured loan using your car title as collateral. Using your car title as collateral does not mean you cannot drive the car anymore. However, it does mean that for a temporal period you do not own the title of the car anymore and that if you default on repaying the loan the lender will take possession of the car.
2. If the local bank or credit union gives such loans, then apply for the loan. The application process would usually require your full name, address, employment records, prove of income in the form of bank statements and references.
3. If the loan is approved, go ahead and sign the paperwork. Mail the signed papers to the lender as well as the title of the car. If it is a local bank or credit union, you want go to the branch and hand in the papers and title yourself. The loan will be given to you in a check or transferred electronically to your bank account. You will receive your title back after you have completed repaying the loan.
4. What if your loan application is refused by the bank or credit union? The next option if this happens, with my experience, is to go to American General company that specializes in bad credit financing. A rep will contact you to arrange the signing of the necessary paperwork, picking up the car title from you and giving you your check.
5. What if any of these do not work out? If any of these fail, search the Internet for auto title loan websites. When you find one you are comfortable with, make your application. You can also visit your local payday loan lender or an auto title lender and make your application to see if you can use your car title as collateral for a personal loan.
When using an Internet lender, it is important to take basic Internet security precautions to protect your identity from being stolen. On the lender’s website, ensure you are filing out application forms from a secure website. Check to confirm that site is secure by looking at the address bar. The website address should be preceded by “https://”. Also look on other parts of the site for a security badge or certificate sign, especially from the pages where you fill out forms.