January 6, 2020
Are Car Title Loans A Good Short Term Loan Option?
When you’re looking for a loan option, it can seem that there are hundreds of different products on offer. This is true – if your credit score is up to muster. The banks and building societies of Overland Park, Gladstone, St. Joseph, and Kansas City are open for business for people who already have a solid credit rating, a home of their own, and a high income. Most of us are not so lucky, but there are still a lot of short-term loan options in Kansas City and Gladstone such as car title loans, personal loans, payday loans, and short-term credit options.
How Do I Get Cash Quickly?
More often than not, when you have a dire need for cash it comes at an unexpected time and you need it quickly. For example, an unexpected medical bill can put fantastic strains on a family’s budget, especially considering the current nature of the medical and insurance industries.
For this reason, many of the more traditional routes to loans are out. Banks take forever to loan money and they rarely offer loans to people with a poor credit rating at all. You may be able to get an increase on your overdraft rating if your account has been in good standing for a number of years.
If you have a credit card, it could be a reasonable option if you’re not going to go over the credit limit. A credit card can have quite a high-interest rate, but if you’re able to repay it very quickly then it can work. If you use a credit card and find yourself unable to repay the full amount quickly, you’ll find yourself in a spiral of debt that so many have found themselves in before. Unable to repay the required amount, the interest you pay rises and you’re slapped with hefty fines that make the hole even worse. Soon, your credit rating has been decimated and it takes years for it to recover.
A further option that some turn to is borrowing money from friends or family. This can be very awkward. A recent study showed that 19% of people had asked friends or family for a loan to get them through a tough situation. If it’s available, it may be worth considering.
Why Are Title Loans Better?
Car title loans are not the answer to every problem but they do offer a lot of advantages over other short-term loan options in Kansas. If you own your vehicle outright, it could pay to consider a car title loan if you need an injection of cash in the short term.
The most immediate advantage of car title loans as a short-term loan is how quickly they can be availed. Midwest Title Loans in Kansas City has made getting a car title loan blistering quick for those who need money as soon as possible. If required, you could apply for the loan and get the cash the same day if you need it.
Car title loan companies can give out loans so quickly as there are no other intermediaries to worry about. Go into a bank and the teller you speak to has to follow some strict rules on how to loan money and will perform a credit check through one or more of the major credit rating companies in America. This takes time, and usually you’ll be declined for a loan anyway!
That’s the second major advantage of car title loans – your prior financial status does not have a bearing on whether you can get a loan. The bottom line is you own a car, that car is worth money, and therefore you have the collateral required for a loan. The lender knows that if you default on the loan there’s value there that can be used to recover their losses so there’s much less risk than say, a personal loan. This means the lender can offer a loan to a much wider range of customers and can do it promptly.
Because there’s no credit check, your credit rating will not be affected. Did you know that most of the time when you get a quote for a loan from a bank that your credit rating goes down? This is because of the relatively basic system that the credit rating agencies employ. Someone applying for a loan is like a mini alarm bell stating that that person needs money and is looking to borrow more. Getting quotes from a lot of lenders in a short period of time says to the credit rating agencies that you’re more desperate for money or trying to take out multiple loans at the same time, which is a risk for them. Your credit rating drops. This doesn’t happen with car title loans, as the provider usually doesn’t run a credit check at all.
Because you own your vehicle and the loan is tied to the vehicle, there’s much less risk for the lender. This can translate to lower interest rates. Sometimes, the interest rates you’ll get on a title loan will be the best rate you’ll be offered, particularly if it’s a sizable amount you need in a short period of time.
Instead of pawning or selling an item, with a title loan you get to keep your vehicle at all times, as long as you make your repayments on time.
Flexible car title loans allow you to take out a loan indefinitely so you can use the value of your vehicle as a type of credit line. When you need money, you can dip into your Kansas title loan credit line and borrow just the amount of money that you need. Interest is computed daily and only on the amount that you borrow, so you will end up spending a lot less on interest than you would had you been forced to take out a larger loan and repay it back over a number of months or years.