Vehicle title loans are not the right fit for everyone. If you have great credit and can get a low-interest personal loan from a bank, that is the loan for you. If you have a house with a lot of equity in it that you can use for collateral on a loan, you probably want to go that route. These are great loans and they work for a lot of people. But not for everyone. So, when do vehicle title loans make sense?
When Vehicle Title Loans are the Right Decision
Vehicle title loans are a very specific financial vehicle, and they have a very specific audience that they work for. If you don’t have great credit, you cannot get a low-interest personal loan from a bank. In fact, if you have only good credit, the interest from a bank will be at least as high as a high-interest credit card. Without really great credit, a bank loan is likely not your friend, unless you have collateral.
If you have collateral, you have a few options. If your collateral is that you own a home—or that you are paying off a home, but you have a lot of equity in it—you can get a low-interest loan. Equity means the amount you have paid off. If your home is worth $100,000 and you only owe the bank $85,000, you have $15,000 in equity. You can borrow against that.
You can also use family heirlooms or jewelry as collateral for some loans.
For many of us, though, those options don’t exist. But we have a car or other vehicle. That vehicle can act as collateral for a loan so you can get the money you need in spite of not having great credit or not owing a home. A vehicle title loan makes sense for you in these circumstances, and if that is you, come see us.