Did you know that approximately 95% of Americans own cars? Owning a car gives you the freedom to travel to and from all the places you want to go, and it also gives you the right to hold the title to your vehicle.
Once you pay off your car loan, you’ll receive the title in the mail within a few weeks. This title is a crucial document to keep, as you’ll need it to sell the vehicle.
Did you also know that you can use this title to get an auto equity loan? If you ever need some money fast, using this title offers an effective way to borrow money.
If you aren’t sure what an auto equity loan is, here is a guide to help you understand.
A car equity loan is a loan type that lets you borrow money against a vehicle that you own. When you are the owner of a car, you can use the car to acquire cash.
One way to do this is by selling your vehicle. However, if you sell it, you won’t have a car to use.
The other option is to seek an auto equity loan. With your car title, you can obtain cash from a lender. Lenders that issue these loans often issue other loan types, too.
For example, they might offer payday loans and personal loans. While you could pursue these loan types when you need cash fast, you’ll reap some benefits from an auto title loan.
Lenders that issue auto title loans evaluate applications before approving loans. The good news is that the eligibility requirements are typically easy to meet. Therefore, most people will qualify for an auto title loan as long as they own a vehicle.
If you own a car, you are one step closer to qualifying for an automobile equity loan. You’ll need a few more things, though. Here is the list of things that most lenders look for when issuing auto equity loans to car owners:
One thing that matters to lenders is the car’s value. If you want to borrow money against a car, the car must be worth money. Lenders look up car values before approving loans, and they base the loan amounts on these values.
You can borrow more money on a valuable car than on a cheap, inexpensive vehicle. The lender will ask for your car’s year, make, and model before approving the loan, so have this information available when you apply.
Secondly, lenders only issue these loans in exchange for titles. Therefore, you cannot apply for one if you don’t have possession of the title. For example, if you have an auto loan on the car, you wouldn’t have the vehicle’s title.
If you misplaced the title, you’ll need to find it or obtain a duplicate before applying. Lenders take possession of the title when offering loans.
Next, you’ll need a job and proof of your income. You can provide your recent pay stubs to the lender to verify these things. Your pay stubs show that you have a job and the amount of money you make.
You need proof of a job because lenders want to make sure that borrowers have a way to repay the funds. If you don’t have a job, you might face challenges getting approved.
Finally, the lender will ask for proof of identity. You can show your driver’s license to prove who you are when applying for an auto equity loan.
The next thing to know about vehicle equity loans is their terms. With loans, terms refer to the repayment plan and loan fees.
While every lender has different term structures, you can expect to receive anywhere from $1,000 to $5,000 for your car title. Remember, you’ll get more if you have a more valuable vehicle.
Secondly, you’ll have around three to twelve months to repay the loan. The length the lender offers you depends on the amount you borrow and your income. You’ll know the duration when you borrow the money.
Next, you’ll have a repayment schedule for your loan duration. You might be required to pay weekly, bi-weekly, or monthly payments. You can read your contract to see how often you must make payments and the options for making your payments.
You can also ask the lender about the interest rate. Interest rates on auto equity loans vary, but they are usually higher than those on other loan types.
Understanding what an auto equity loan is and how it works is vital if you need a way to obtain cash fast. It might also be helpful to learn the benefits of auto title loans.
The first benefit is that these loans offer an instant way to get cash when you need it. They are easy to get, and you can get approved quickly.
Second, you get to keep your car with an auto title loan. While the lender holds onto your title, you get to keep your vehicle.
The last thing to know is the risks when auto title loans, and there is one main one to understand. If you don’t follow the repayment schedule you agreed to, the lender can repossess the vehicle.
If you can’t make a payment, you can avoid repossession by contacting the lender. When you contact them, they might agree to modify your repayment plan.
Now that you understand what an auto equity loan is, are you ready to apply for one? Getting an auto equity loan is a simple process that can result in obtaining cash quickly.
At Rapid Cash, we offer auto equity loans and other types of short-term loans. If you’re interested in applying, fill out this form. You can also contact us if you have any questions.