Car Title Loans: Advantages And Disadvantages

May 16, 2012 by  Filed under: Loans 


There are two major advantages of car title loans:

*The ease of obtaining the loan.
*Continued use of your vehicle.

The ease of obtaining a car title loan has made these types of loans very attractive to people who are having trouble with their finances. It does not matter what your credit score is, the loan is based on the value of your vehicle. If the value of your vehicle is equal or greater than the amount of money you are requesting in your loan, then you will have no problems being approved. The lender will inspect your vehicle and determine the worth.

Most auto title loan stores will have information on the Internet as to what you need to have with you when you visit one of their locations. When you can bring all the documentation required of you, you can have your loan in hand in as little as twenty minutes. Some businesses will have applications online for you to fill out and send in making the process even easier once you get to the store. There is no credit check or background check involved in the approval status. The vehicle is your fast access to cash.

These types of loans are secure, meaning you will hand over the title of the loan for the period of time the loan is being paid back. Secure loans use collateral to speed up the process and make lending less risky. The collateral is the trade off for a fast loan without the long approval process and high risk for denial without it.

Auto title loans are not after your car. You can drive it off the lot with the money in hand. You get continued use of your car or truck while your loan is being paid off. Lenders of this nature use the secure loan process, meaning use of collateral, as a guarantee that you will repay your loan. Financial institutions who give unsecured loans, with no collateral involved, are basing their approval on your credit history as they are lending money on the assumption you will pay it back along with the interest payments.

Those people who have bad credit are not being approved by banks and they are finding a higher success rate with car title loans. A bank will most likely turn you down if you have bad credit and request thousands of dollars to consolidate your debt or to pay bills. With an auto title loan, you will get what you need without the hassle.


Car title loans are given on the notion that you will pay them back in a short period of time. The interest rate is low in the beginning, but if you continue to extend your payments further out, the interest rate grows. Extending your loan too far and then not being able to afford it, will put you at risk of losing your vehicle. The lender will then sell your car to pay back the loan. You will have to make up any difference as well as be without a car.


Do your shopping if you have decided that a car title loan is your best access to the money you needing. Find a lender who has the lower end interest rates. Understand the documents you are signing. When your credit is bad, having a car does give you access to fast cash, but be realistic about how you can afford to pay it back. Take your time to work through your end of the transaction to make sure you can keep up with the payment schedule. Going the extra step will make it a win win situation for you, getting money you desperately need quickly, continued use of your collateral, and paying your debt off in a favorable time limit.

Approved Money Center Payday Loans are available to you when you need to make that last minute payment. Visit or one of our convenient Texas locations to find out more.

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