A car title loan, or simply title loan, is a loan where the borrower provides their car title as collateral for a loan.
These loans are typically short-term, and tend to carry higher interest rates than other sources of credit. These loans have higher interest rates than other sources of credit due to the fact that the lender typically does not check credit and that the only consideration for the loan is the value and condition of the vehicle.
Most title loans can be acquired in 15 minutes or less on loan amounts as little as $100. Most other financial institutions will not loan under $1000 to someone without any credit as they deem these not profitable and too risky. In addition to verifying the borrower's collateral, many lenders verify that the borrower is employed or has some other source of regular income. The lenders do not generally consider the borrower's credit score. The loan is secured by the title to the vehicle
Car loans are loans made for the purpose of purchasing a vehicle. Today almost nobody pays for car in cash. The two most popular ways to buy a car is to get a car financing or to lease the car.
Before getting a car loan you need to make a few decisions. The first decision you need to do is what car you need. Deciding what car you need depends on several factors. The first and most important factor is to estimate what you can afford (what is the maximum you can spend on the car). Another factor in your decision will be your life style and social situation. For example if you are single and have high income you can get a car loan for fancy sports car (BMW, Audi, Lexus) or if you have a big family then you might have to finance a van. Deciding if you want to buy a new or used car is also important because buying new car will be more expensive, but if you buy used car then you have to be prepared for additional expenses for repairs and maintenance.
Once you have decided what car to buy and how much you can afford, it’s time to find a lender to finance your car purchase. The first option is to go and ask one of the banks for a car loan. Almost all banks and many other financial institutions offer car loans. You can get a car loan from the car dealer you are buying the car from, but dealer car loans are usually more expensive (they have higher interest rates) compared to what your local bank can offer.
You should approach getting a car loan as getting any other loan. First shop around and compare car loan rates offered by different banks, financial institutions and car dealers. Once you have found the best car financing offer make sure that there are no hidden fees, and make sure that you understand the car loan contract conditions. Finally, don’t over think it; just get a car loan for a vehicle you can afford and you’ll be just fine.