Title loans offer several distinct advantages for borrowers that traditional loans don't offer. If you're looking for a loan that you are eligible for that will help you cover expenses, a title loan might be the ideal financial product for your needs.
You should explore title loans and learn about their unique benefits to determine if you should apply. The following are six helpful benefits title loans offer that you should know about.
1. Lack of Strict Credit Requirements
One of the biggest reasons why consumers opt to take out title loans is because these loans don't require a high credit score for approval. Title loans are considered secure loans. This means that they involve collateral provided to the lender by the borrower.
The collateral minimizes the risk that the lender has to handle, and therefore, the lender is not as worried about the prospective borrower's credit score. Consumers with poor credit or no credit history are frequently approved for title loans.
2. Lack of a Credit Check
Not only is credit history less important with title loans, but in some cases, it's ignored completely. Some title loan lenders will not even require a credit check for certain applicants.
As a consumer, you should be aware of the fact that a hard credit inquiry can lower your credit score. Every time you seek a loan, you have to deal with a strike against your credit if the lender you apply with conducts a credit check. Because title lenders often don't do credit checks, consumers can seek title loans without worrying about lowering their credit score.
3. Simplicity of the Application
Applying is generally simpler with a title loan application, as opposed to a traditional loan application. The application for a title loan will focus on basic details regarding the vehicle, including the vehicle make and model.
For a traditional loan application, applicants often have to track down references and undergo extensive background checks before they can be approved. The title loan process does not usually involve these time-consuming requirements.
4. Continued Use of the Vehicle
Consumers who take advantage of title loans get more out of their vehicle. They don't have to give up use of their vehicle throughout the life of the loan.
While borrowers will need to submit the vehicle title to the lender to take out a title loan, they continue to use their vehicle just like normal. Their vehicle functions as both an everyday mode of transportation and loan collateral that helps the owner to manage his or her finances.
5. Freedom When Using Loan Funds
Consumers can use title loan funds on any expense they want. While many consumers need loan funds to cover basic expenses like bills and rent costs, others take out title loans to pay for vacations or other optional purchases.
Some traditional loan types require consumers to use loan funds on a particular purchase. For example, an auto loan will require the borrower to purchase a vehicle, and the lender will put a lien on the vehicle title. Title loans are a good option for borrowers who need a loan that offers them the freedom to spend funds at their own discretion.
6. Speed of the Process
Consumers typically have to wait longer for traditional loans to be processed than for title loans to be processed. With some title loan lenders, loan funds are given to an approved applicant within only 24 hours of the original application submission. On the other hand, applicants often must wait seven days or more before they have access to loan funds from a traditional loan.
If you'd like to learn more about the title loans that are available to Georgia residents, contact us at Title Exchange to find out more.