So, when you are going through a financial crisis and cannot take a loan from the banks due to several reasons like bad credit or time constraints or anything like that. Then, it is perceivable that you may opt for a short-term loan or any kind of a quick cash loan that can be availed instantly for bad credit.However, personal loans for bad credit come with their own pros and cons. So, it is better that you research well about all the options and the different types of quick cash loans before taking a decision.
The most important and easily available personal loans for bad credit are the payday loans, installment loans, and the title loans. Most of the times, especially when you need a larger amount of loan that accordingly requires longer repayment tenure, the instant payday loans are out of context as they provide only small amounts of loan and have short repayment tenure which is typically by the next payday.
So, the next available bad credit loan options would be the installment loans and the title loans. Installment loans are unsecured loans which have a slightly higher APR than the title loans which are secured loans. So, if you are looking to save your pennies by cutting down on your expenses in every possible way, then it is better to choose the title loan of the 2 options as it is a comparatively low interest personal loan.
Before availing a title loan, it is important to be aware of a few facts and terms in relation to it.
A Car Title loan, also called as the title loan is a type of a low interest personal loan that is given in exchange to the title of the car which is taken as collateral. To be eligible for a title loan, it is essential that you have a car with its ownership title in your name. So, the car title has to be handed over to the lender who will offer you a title loan and have the car as a lien until you repay the loan. If you fail to repay the loan, then the lender will have all the rights to possess the car or re-sale it to plank out the loan amount.
When you have a bad credit score or when you have time constraints and need immediate cash, then you can avail the personal loans for bad credit. Since the title loan is a secured loan, it has interest rates that are slightly lower than the other bad credit loans. So, if you are looking for a low interest personal loan, then title loans could be a preferred option.
Most title loans offer small to large loan amounts which are usually dependant on the value of the car. Most lenders provide a maximum loan amount that accounts for around 25% - 50% of the car’s value. They can be repaid within a short-time or on a longer basis depending on the loan amount and the lender’s terms.
These loans can be availed online also and you will have to provide the lender with a copy of the car insurance details, the title ownership details, your identification proof, a set of duplicate keys, etc. There have been cases when the lenders keep a track on the car by using the GPS tracking facility. All these formalities have to be completed when the application is being filled up.
It is important that you read and understand all the terms and agreement carefully before finalizing any loan. It is also essential to note if the lender is imposing a monthly interest rate or an annual APR and calculate accordingly. Also, make sure to borrow only a small amount which can be repaid on time. If you default it, then it may either lead to debt roll-over with a higher interest rate or else you may lose your car.
So, make wise choices before you lose your assets and fall into a debt trap. Make sure to avail a loan only if it is needed and only for the required amount of money, which should be repaid on-time without leading to any backlashes.