Vehicle prices have increased dramatically over the past 30 years and continue to. Second only to a home, a vehicle is the largest purchase most people will make. As a result, some people have a significant amount of equity in their vehicle, and a Title Loan is a way to quickly and easily access that equity.
A Title Loan is a short term loan using your vehicle as collateral. The lender holds your Title and records their lien on it, similar to when you purchase a vehicle and finance it. In Virginia, a Title Loan is a fixed interest monthly term loan with a period of 4 - 12 months. In that way it is very similar to a car loan; except the interest rate is higher (much higher depending on the lender). In Virginia the loan will have fixed monthly payments of both principal and interest; so each month the loan balance is reduced. Other states have different rules; several have 30 day Title Loans and some have interest only payments. We are in Virginia, so if you are in another state be sure to check that states Title Loan regulations before getting a loan.
So what are some of the reasons people get title loans, and what are some of the reasons people don't get title loans?
Some people get a Title Loan to avoid a hard inquiry on their credit report and to avoid a loan on their credit report. We do not check customers credit, and we do not report the transaction to any credit reporting agency. Some customers are in the process of rebuilding their credit and need a short term loan but do not want to use their credit card. Some customers get a Title Loan to pay off credit card balances to increase their credit score prior to purchasing a house so that they can get the lowest mortgage rate possible. If this is important to you make sure to check with your lender about whether or not they report the loan to the credit bureaus.
As stated, we do not report any transaction to the credit bureaus and we do not share or sell any personal information with any third party. Some borrowers need short term cash, have equity in their vehicle, and prefer not to be added to calling and mailing lists. We respect our customers' privacy. If this is important to you check with your lender to verify they follow the same process. I personally hate it when a company I do business with shares or sells my contact information. As soon as that happens the Junk mail from credit companies and calls from telemarketers start and never seem to stop.
Time is often a big factor in the decision to get a Title Loan. Some customers do not have time to wait for their bank or other creditor to review an application and process a loan. With a Title Loan, the process is usually completed in less than an hour. When you get a Title Loan in Virginia, the funds are dispersed as soon as the loan is processed. With us, we provide cash or a check. For customers with an emergency this is very important. Again, if this is important to you check with your lender (most in Virginia provide funds the same day).
Sometimes it is just plain easier and more convenient to get a Title Loan than to get funds through other methods. For customers that plan on paying the loan off in less than 12 months, the convenience factor is more important than the interest rate. We have made making payments easy, accepting multiple payment methods, and we offer the lowest interest rates in the area.