Title Loans vs Bank Loans

A title loan is a fast, safe and easy way for individuals who own their car with a lien free title to get cash using their car as collateral. It allows people to obtain funds using assets (their car) to solve short-term financial needs. The process is usually simple and requires a minimal amount of time to obtain a loan.

Let’s take a look at some comparisons between title loans v. traditional bank loans…

Application Process

Bank – usually a lengthy application requiring many documents, references, etc.

Title Loan – simple, one page application, minimal paperwork

Timeframe to Receive Funds

Bank – can take weeks, even months, sometimes up to 90days

Title Loan – same day, usually less than 1 hour!

Credit Check

Bank – lengthy credit check, often going back 7-10 years

Title Loan – absolutely NO CREDIT CHECK

Repayment

Bank – when an individual pays off a loan early, banks lose interest income…to offset this, many banks will charge a “pre-payment” penalty

Title Loan – no pre-payment penalty, in fact, paying a title loan off early may help to build a positive relationship with the lender which may allow individuals to qualify for another loan later on

These are just a few of the many differences between an auto title loan and a traditional bank loan. Recent economic conditions and credit markets have made it more difficult than ever to obtain a loan from a bank. Title loans are a great way for every day, hardworking Americans to get access to cash when they need it most.

As with any financial product or service, anyone considering borrowing money should do so responsibly. We encourage individuals to consider all available financial options and work closely with financial institutions to determine affordable repayment terms. For more information on short-term financial services please visit http://chicagotitle.loan

Choosing the Right Auto Title Lender

If you look at auto title loans in Chicago, you’ll be surprised that at this point, these loans are excellent investment for the person taking the loan. Most of the time, people under financial strain opt for this loan as it is quick to get approved and provides instant cash without needs for a credit check. If you are contemplating taking this loan, you might be unable to pay your rent or need money for medical expenses but whatever the reason maybe, it is true that auto title loans can be the right source of instant cash.

Depending upon your vehicle’s value, you can get about 50% of the vehicle’s value. Though there are companies that offer up to $3500- $5000, it completely depends upon the car or vehicle you are putting as collateral. However, the loan amounts differ as per the company that you approach and have their own percentage of the estimated value that they give as loans. So if you have an expensive car, you’ll get approved for more but if it is an old car, you’ll get less. Basically the lender looks at the condition of your vehicle, the way it is maintained and checks the mileage.

Looking at the pros and cons of a Chicago Car Title Loan

For the borrower the benefits are many. The advantages outweigh the disadvantages of loan for borrower despite the higher than usual interest rate that they have to pay usually because the loans are not disbursed after credit checks. Regardless of your financial situation and FICO score, no auto title lender looks at these factors when you are approved. That is because these are secure, collateral loan with no-risk to the lender in most situations. As you have to turn over the title deed in the name of the lender, but you get to keep and drive it around. Some of the lenders get a GPS system installed in the vehicle that has been kept as collateral to ensure that they are aware of the location of the vehicle at all times.

To successfully pay off the loan, you need to be calculating the repayment amount that you will need. And even if you are offered more than what you need, don’t take the extra money because you’ll be paying interest on it unnecessarily. It is best to take only the amount that is needed.

It is best to work with licensed lenders that have ethical policies. You need to find a lender that provides you all the details of the title loan that you intend taking.