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Can Car Title Loans Damage My Credit?

In today’s lending world, credit history and credit score are everything. Some people will shy away from a car title loan believing that it may damage their credit. But, can a car title loan hurt your credit rating? Any damage that might occur depends on the borrower. First, it helps to understand how a car title works.

What Is A Car Title Loan?

A car title loan is a short-term loan where a borrower uses the title to a vehicle as collateral in exchange for a loan. Embassy Loans is a well-known title loan company that has helped tens of thousands of individuals access much-needed cash using their cars or trucks as collateral.

How Do You Obtain a Car Title Loan?

The process is pretty simple. An interested party fills out an application to begin the process. At Embassy Loans, applications can be completed in person or online. Applicants will have to submit certain forms of documentation to prove their identity and that they do indeed own the car used as collateral. Once verified, the lender can appraise the borrower’s car for value and the final loan agreement is drafted. The entire process can take as little as an hour.

What about Credit?

Since you effectively base a car title loan on collateral, there is no need to check a borrower’s credit history. The process is therefore rather quick. Unlike traditional loans from a bank, there is not a lot of paperwork involved, as the lender doesn’t base the loan on the borrower’s credit history or score. This swiftness is one of the advantages of a car title loan. Individuals who may have a less than worthy credit history can still borrow money.

Can the Loan Hurt Your Credit?

Once the lender completes the loan and a borrower receives the money, he or she will have the terms of the loan agreement and must meet them to avoid any repercussions. A car title loan, as with any loan, will damage your credit score if you fail to repay it. If you do default on the loan, Embassy Loans does have the right to take possession of your vehicle. If repossession did occur, the vehicle would be sold to try and recover some or all of the losses incurred.

Repossessions rarely occur on car title loans. In fact, most borrowers repay their car title loans, which has a positive effect on credit. Making payments on time and paying off a debt positively impacts a credit history positively.



Embassy Loans is a leading provider of auto title loans since 2005

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Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

Monthly Interest Rates range from 1.5% to 2.5% (18% to 30% APR), with 15-18 Month Terms.

No Prepayment Penalties!

Embassy Loans uses “Title Loans” for advertisement purposes only and provides auto equity loans. Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” under Florida Statute 516 and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

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Frequently Asked Questions

What is an Auto Equity Loan?

An auto equity loan, sometimes known as a car title loan or a car equity loan, is a type of loan that allows you to borrow money by using your vehicle as collateral. The loan is secured by your vehicle, meaning you agree to use the equity in your car to back the loan. 

What is an Unsecured Personal Loan

An unsecured personal loan is a loan that does not require collateral. Funds are provided based on your credit worthiness and your ability to repay. 

What Is the Credit Builder Program

The credit builder program is designed to help individuals establish or improve their credit score with the primary purpose of building a positive credit history through regular payments.

Can i have more than one Loan at a time?

Embassy Loans can only extend one loan at a time and it’s advisable to start with one and focus on making payments in a timely manner to prevent default.

What happens if I miss a payment?

Missing a payment can have negative consequences, including late fees, a drop in your credit score, and potential default on the loan. Consistent, on-time payments are crucial to benefit from the program.