Getting a loan against your car is a good option for those with bad credit. Having bad credit can be a tough time in your life, and getting a loan will not come easy. Lenders rarely give out money to those with bad credit. This may be one of your only options to get some fast cash. A car title loan, or sometimes called "pink slip auto loans" are collateral loans, where your car is put up as the security for the loan. With bad credit, it is unlikely that you have a lot of equity to your name. Your car may be your most valuable possession, and that can be a big help if you are looking to borrow against it. Here are the steps to obtain your loan.
Step 1: Look for Lenders
You should research thoroughly around the Internet, as well as calling up different lenders for these loans. There may not be a lot of lenders out there offering loans, however this is one loan that is likely to be available. These loans can be very profitable for lenders, since many people end up not paying on time. The consequences for this can be either extremely high raises in interest rates, or repossession of your car. The lenders in the end can make a ton of money this way. When you are looking around, try to find some reviews from others who have used the lenders. It is important to find a "forgiving" lender. These loans are typically a month in length, meaning you don't have that long to pay it back. Please be aware that this loan is dangerous from that perspective.
Step 2: Talk to a Lender
Once you have picked your lender, you will want to meet them in a face to face chat. They can answer your questions better, and you can lay out the terms of the agreement. The most important part of this conversation is the discussion of interest rates. These loans have high interest rates, and are often based on monthly, not annual percentages. That means a 25% interest rate is really equal to a 300% APR. These loans can get costly if you don't pay them off in time.
Step 3: Valuation
Valuing your car is the next step. Before you head over to the lender, you should have your car washed, or wash it yourself. The better the car looks, the more value it has to a lender. They will not go through a rigorous car inspection, so if it looks good, they will likely offer you more money. They will let you borrow money on the car's value, and usually you can borrow up to half of the value. The more you can get your car valued at, the more you can potentially borrow.
Overall, car title loans are an option for those with bad credit. No credit check is required since it is a loan based on collateral. If you do not pay off the loan in time, you can lose that collateral, which would be your car. Make sure you can pay off the loans in time because the consequences can be dire.