What is a title loan and how do they work?
A title loan, or auto title loan, is a type of short term loan in which the borrower uses the title of their:
- boat, or
- other vehicle
…as collateral against the amount of the loan.
The borrower will allow the title loan company, or lender, to place a lien on the title and also allows the lender to safely store the actual physical copy of the title in their vault or other secured location. The lender will usually issue the borrower a check for the amount of the loan, and go over the terms of the repayment process.
One the loan has been paid off, the title loan company will release the title, remove the lien, and give back the title to the owner. In many states, the borrower will have the option of having a brand new title mailed to them by that states Motor Vehicle department so that there are no signs of the lien ever having been placed on the vehicle and title should you prefer.
In the case that a person cannot pay back the title loan, the vehicle is sold and the lien is paid off with the remaining monies going to the owner of the vehicle. Because these loans are usually short term, the interest rates are typically higher then unsecured loans.
That said, reputable title loan companies are usually more inclined to make arrangements should financial difficulties arise and should the borrower need more time to pay back the loan.
In order to know if you qualify for a title loan, please visit How do I Qualify for a Title Loan. If you are ready to apply for a title loan and get the money you need today, please fill out the form above or visit the links below for the Georgia, USA city nearest you.