Collateral is a contractual device used by borrowers and lenders around the world. Generally, it refers to assets pledged by a borrower to secure the loan. A secured loan, also known as homeowner loan are protected by an asset or collateral of some sort. It reduces the cost of borrowing, as it gives the borrowers incentives to work hard, why? Because the collateral maybe worth more to the borrower than to the lender. The borrower is not always ready to forgo his/her property easily.
Are you planning to go on a fun trip in Long Beach, or do you just want to explore California? Then you’re covered with car title loans. These loans are short term and tend to carry lower interest rate than all other sources of credit. It has grown increasingly popular helping individuals with poor credit. Using the value in your car, you will have the opportunity to qualify for a secured loan with better terms and lower rate.
How does a car title loan work?
If you were to take your car or other valuables to a pawn shop, any employee behind the counter would give u a loan based on what your items are believed to be worth. In this case, the shop will lend you money and charge interest.
This is just how a car title loan works at city loan. In a car title loan, the price of your car is evaluated based on the wholesale value, and then a loan is issued to you. Your car’s title is then held on until your loan is repaid.
Benefits of car title loan.
- There is quick and easy access
You don’t have to go through the stress of paperwork or documentation before the loan can be made, it’s completely free and fast, you might qualify for a car title loan via our website, it’s always within twenty-four hours.
- You still retain the possession of your car
Borrowers are opportune to use their cars as collateral against the money they’ve borrowed. This means they are free to use their cars while still on the loan, the title will only be retrieved when the money lent is retrieved.
- There are no strict rules behind it like other loans
Unlike the mortgages and the home equity lines of credit, car title loans do not have strict credit scores requirements. So more loans are being made than traditional lenders. Gross monthly incomes of borrowers are being checked on to be sure of they are capable of refunding.
Car title loans vs. other short term loans.
Still considering car title loans as the best, one reason clearly differentiates it from other short term loans. The amount that can be borrowed is relatively low compared to car title loans, the terms are short, and the interest rates and fees of other short-term loans are very high.