December 8, 2018
Missouri and Kansas houses hardworking, salt-of-the-earth people. We’re known for our great barbecue, our music and arts scene, and our beautiful fall foliage. But one thing these states are not known for is for their good credit scores. The average Kansas resident with a credit card has an unpaid balance of $6,082, whereas the average Missouri resident with a credit card has an outstanding balance average of $5,897. This doesn’t mean people with high balances on their credit cards are bad people or even bad at controlling their finances. However, if these balances are over half of the total limit of their credit card, there can be dire consequences for the cardholder.
Credit card usage has a high impact on credit reports, which means even if a cardholder is excellent at budgeting, pays all their bills on time, and has a decently old credit history, they can still have a less-than-stellar credit score because of the amount they owe on their cards. When it comes time to buy a car or pay for a significant house repair, obtaining a loan with poor credit scores is next to impossible. Luckily, if you own a car and need to make a payment quickly, options exist in the form of a title loan.
A Closer Look at Title Loans
Title loans are a form of alternative lending that is optimal for people with poor or fair credit. This is because applying for a loan with your title does not involve a credit check. If you have a car and you own it or are making payments toward owning it outright, you have the means to obtain a loan.
These types of loans are for the full worth of the car. Instead of putting blind faith in your creditworthiness, title loans essentially buy your vehicle from you, and your successful loan payments ultimately end with your ownership of the car again. If you own the car outright, you bring it into a title loan lender, like Midwest Title Loans, and the lender then assesses its worth. The worth of a car is dependent upon many factors including the market value of the car, its condition, the type of car, and the year. Then, the loan offer is for the total value of the car.
If you do not own your car outright, or if you have a lien on the title, exceptions can be made to help you take out a loan against this car. In instances like these, the lender will still assess the total worth of the vehicle. Then, they will pay off the remainder of the amount due on the vehicle. As an example, if you own a 2018 Volkswagen Tiguan and still owe $10,000 toward the ownership of the car, the lender will send the owner a check for $10,000, and you will continue making car payments to the title loan lender. As you can see, nothing about the state of ownership of the car changes, you change to whom you make payments.
Dispelling Myths About Title Loans for People With Poor Credit
Unfortunately, many people do not consider title loans a viable lending alternative because of the big myth that surrounds it. From naysayers making claims that interest rates are far steeper than many credit cards to others who fear they will never see their car again, there are many false rumors spread about title loans. For people with poor credit or no credit history, physical collateral, such as their car’s title, is proof enough that they can make payments toward a loan amount.
The most important thing for those thinking about taking out a bad credit loan is to remember is that asking questions will help you in the long run. Reputable title loan lenders, like Midwest Title Loans, will help their customers understand the details of their loan because they know that the lending process is a symbiotic relationship. While some lenders do not care to discuss the details of their loans with their customers, the best lenders will because it ultimately means the best for the customer as well as the most profitable relationship possible for the lender. Good customers stick around, and that is true even in the title loan business.
Ask your lender about the interest rates, loan repayment period, how many payments you must make per month, the flexibility of those payments, including the payment dates and types, and even how they want you to pay. Some lenders will ask you to bring weekly payment into the physical location while some will allow you to mail it. Clearing up these questions with your lender before signing off on your loan will keep you protected while allowing you to reap the benefits of this bad credit lending option.
Some of the benefits of taking out a title loan include:
- Receiving payment quickly, generally on the same day.
- There is no need to make multiple visits to the bank at their request.
- Still being able to use your car. Unlike pawn shops, you keep your car while you make payments toward its worth.
- No one is turned away because of bad credit.
- This can shorten the amount of time you take to own your car fully.
- Small town businesses, like Midwest Title Loans, work harder to understand the needs of their neighbors.
For over 20 years, Midwest Title Loans has been serving the valuable communities of Kansas and Missouri with our financing options for bad credit. We see our services as a critical part of helping those who need additional financial help in times of economic hardship, and we strive for compassion, openness, and honest when doing business with our customers.
To get started with your loan, call or visit one of our business locations. We have stores in Kansas City, Gladstone, and St. Joseph, Missouri as well as locations in Kansas City and Overland Park, Kansas. For more details about the locations of our stores, store hours, or phone numbers, visit our website.