Are Car Title Loans a Good Way to Raise Fast Cash? You Decide

As we all know, lenders of money are nothing if not creative, when it comes to finding a way to loan you money, while minimizing the lender's risk. Car title loans are one such vehicle. Here we take a look at how car title loans work and give you some points to consider before you apply.

In order to obtain title car loans you must own the vehicle free and clear, holding the title. The age and condition of the vehicle in question also must meet certain criteria. Unless you have a 'classic' car, which appreciates in value over time, you'll find lenders reluctant to give you car title loans that make the transaction worth your time and money. Basically, the agreement works like this: you sign over the title to your car, to the bank, in exchange for a certain amount of cash up front, which you repay over time, just as with a conventional car loan. Let's say you paid $10,000 for your new car 5 years ago and have now paid it off, and hold the title. The current Kelly Blue Book(R) value is now $4200. In this case, the lender will be willing to lend about $3300 on a car title loan. If approved, you get the cash and start making monthly payments, including interest.

This may be a plan in certain scenarios. If you've got a good credit rating and can manage the payments on a short term loan of say, 2 or 3 years, you'll probably get an APR that is competitive with your credit cards. Naturally, you're again paying interest on the same vehicle, but this could be a smart move.

On the other hand, if your credit rating is not good, you'll have greater difficulty in getting the loan and won't enjoy a good APR. If your situation is so shaky that you're not absolutely certain you can meet the monthly payments, you may not want to risk having your car, paid off once, and repossessed the second time around!

Taking cash loans for car titles can be a risky business, for you. No longer in possession of the title, the car becomes the collateral for the loan, leaving you open to losing your transportation when you need it most!

Be sure of the amount you need to borrow. If you don't need but $1000, car title loans can be arranged for just that amount. You don't need to borrow the maximum amount. The smaller the loan, the better you'll make out in overall cost.

Another strategy you may want to employ is that of speaking with a financial consultant, or your own bank, to see what other options might fulfill your financial objectives, both in the short and long term.www.titlecarloans.net