Texas residents who need money fast may turn to title loans for help. Title loans are an alternative to payday loans and bank loans, but the interest rates are high, and the loan terms are strict. If you’re thinking about taking out a title loan, it’s important to understand the process before you sign any paperwork.
A title loan is one of the fastest ways to get cash in Texas, but it offers a lot more than just ease of access. A title loan can be used to consolidate debts, provide a financial cushion for unexpected expenses, and even help you take a vacation.
Title loans are somewhat complicated, so this guide will start with an overview of the process and then go into detail about what you need to know when applying for a Texas title loan.
What Is A Title Loan?
A title loan is a type of short-term loan that uses your vehicle as collateral. The lender will take your car’s title as security against the loan, so they’re protected in case you default on the loan.
You will drive away with cash in hand, in exchange for your vehicle’s title and any valuable items, such as electronics or jewelry, that you have on hand. A typical loan lasts 30 days or less, and it must be repaid at the end of that period.
A title loan is similar to an unsecured personal loan in that you do not need collateral for the loan. You use your car title as collateral for a loan. There are two different types of title loans: a hard money title loan and a soft-money title loan.
A hard money title loan is one in which you borrow more than what your car is worth. A soft money title loan is when you borrow less than what your car is worth. There are pros and cons to both, but typically, the borrower takes out a soft money title loan because it has lower interest rates.
How To Look For A Title Loan Option
If you are considering a title loan in Texas, then you should learn as much as you can about it before you take the plunge. The state, city, lender, and terms that apply to your situation will all be different. You can find lenders throughout Texas as long as they are licensed by the state and regulated by the Texas Department of Banking.
According to a review posted on Facethered, lenders providing title loans in Houston may charge different rates depending on your location, income, and credit history. You should be able to find a lender that fits your needs within your price range.
You can gather information by talking to people who have used them in the past and by looking online. You could also consider contacting your local credit union or bank and asking them if they offer a title loan option.
Applying for a Title Loan
The first step of applying for a Texas title loan is deciding which company you want to work with. There are many different lending companies available to choose from.
You can look online or ask friends and family if they know of any good ones that you could use. Once you have decided on one, it is time to contact them and see what their requirements are. They will most likely ask for proof of current employment, your social security number, proof of residence, and vehicle ownership.
You will also need to stop by the lender’s office with some form of identification (such as a driver’s license) and the title to the car that you would like to use as collateral for the loan. Once you are approved, you should receive the money within two business days if you borrow $1,500 or less, or within one business day if you borrow more than $1,500.
Title loans work by using your vehicle as collateral for the loan. If you fail to make the payments on the loan, the lender will take your vehicle and sell it to cover the cost of their loan. To apply for a title loan, you must meet certain criteria.
An applicant must be 18 years or older, have a valid driver’s license and proof of insurance on the vehicle used as collateral. This loan is a short-term solution.
Although it might be tempting to take out more than one title loan to solve multiple financial problems, this is not recommended as it may increase your interest rates.
The best option is to find the right company, get what you need, pay back the money on time and avoid taking out another title loan for at least 3 months.