Title Car Loans: A Look At How Much Money Is Really Available

When most people think of borrowing money, they think of banks, with their long, drawn out application process, or credit card and payday cash advances, which come with exorbitant interest rates, hidden fees, and other threats to fiscal health. Auto equity loans provide another, more affordable option that allows borrowers to get the money they need quickly, conveniently, and affordably.

Title car loans use the equity in a car or truck to provide security to the lender, allowing them to offer lower interest rates. This is all done online, without hidden membership dues, fees, or prepayment penalties. While each company has their own policies regarding just how much they are willing to lend, and at what rates, most online auto equity loans are granted following the same basic principles.

What's It Worth?

Since the vehicle is used as collateral, the amount that can be borrowed is based upon the wholesale value of the car. This is called its 'fair market value.' In the United States, fair market value is defined as, 'the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts." Of course, the valuation process can be rather subjective. Everyone wants their car to be valued as highly as possible, while the lenders want to minimize their risk. To avoid conflicts of interest on either side, vehicle valuation services, such as the Kelly Blue Book website, are used to determine a car's fair market value when applying for loan on car title.

To determine the value of a vehicle, the year, make, and model are entered into the Kelly Blue Book website. Next, a series of vehicle attributes can be selected to better describe the car, such as power steering, power windows, braking system, mileage, and any major damage. These highly respected website even factors in the location of the car to provide a more accurate analysis which helps borrowers find the best auto equity loans for their needs.

Ratios, Rates, And Respect

Auto equity loans are issued based upon a company's loan-to-value ratio. This ratio is the percentage of fair market value that lenders are willing to offer. For example, 50% of a car valued at $5,000 would result in $2,500 being offered. Companies vary from place to place on this ratio, so it is worthwhile to shop around. Most firms will require that the vehicle being offered as collateral be no more than 10 years old and worth at least $2,500. Generally, proof of a clear title, identification, and insurance must be provided, as well as a most recent rent or mortgage statement, utility bill, and pay stub. All of these can be provided and verified online through secure websites. www.titlecarloans.net

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