What to Know Before Using an Auto Title Loan to Manage Your Finances

Qualifying for a car title loan is a handy instrument for your financial tool belt. You can use it in key situations to succeed at any goal you’ve set. Plus, it’s an oft-needed windfall, helping in a wide variety of rainy-day situations. 

However, you need to consider a few things before committing to an auto title loan. Paying any loan back is a big responsibility, so be sure you can handle any payments before committing to a loan contract. Otherwise, your car title may be used to cover the balance. 

Read on for our complete auto title loan guide for everything you need to know before taking out a car title loan!

First Off: What Is an Auto Equity Loan?

Auto title loans are short-term loans developed to help borrowers use their car title as leverage for fast cash. While you need significant equity in your vehicle to qualify, owning your car outright gives you access to a fast-processed loan based on its value. 

Essentially, you put up the vehicle title as collateral for a loan. You decide on a payment plan, then make regular payments towards the balance. If the borrower defaults on payments, the vehicle title is offered up as payment. 

There are only a few things you need for your vehicle to qualify for an agreement with Embassy Loans. However, unlike other types of loans, there is no credit check involved with leveraging auto equity. Bad credit or no credit, you still have a shot!

Considering an Auto Title Loan? What You Need to Know

Before you hop into a contract, it’s important to think about using title loans smartly. There can be serious consequences if you’re unable to fulfill your monthly payments after signing any agreement.

That being said, managing debt with title loan agreements is a great way to get yourself out a financial rut. You can collect income between paychecks, consolidate debt, and pay off higher-interest loans. 

As long as you’re responsible, they can be a valuable resource to keep in your back pocket.

Here are the most important things you need to know before using a title loan to manage your finances: 

The Appeal: Benefits of an Auto Title Loan

Compared to other loans like payday loans or personal loans from large banks, auto title loans carry quite a few surprising benefits. 

• Quick Approval: Minimal credit checks and faster processing times mean many borrowers get their money within a day or so. 
• Requirements: You only need a few official documents, FL residency, and personal references to qualify. 
• No Credit Check: There’s almost never any credit check required for auto title loans, making them a great option for low credit or no credit borrowers. 
• Flexible Payment Period: You can structure your payment schedule around the value of your vehicle, plans varying from just a couple months to two years. 

As you can see, using title loans smartly isn’t just about how much you borrow, but when you borrow and how you quickly you pay it back. 

Managing Finances with an Auto Title Loan

One of the main reasons many borrowers opt for an auto title loan is because it allows them to quickly pay off other debt, consolidating the total balance under one lender. 

Not only does this make debt easier to manage, but it also gives you more time to pay it off, giving your credit score a breather along the way.

However, managing debt with a title loan can be a risky proposition. They often have elevated interest rates, so you have you be sure you’re ready to take on a higher monthly payment in order to clear the debt. 

Embassy Loans encourages you to weigh all your available options before committing to any financial arrangement, no matter the type. 

Risks of an Auto Title Loan

The most important thing to be aware of when taking an auto title loan is that the ownership of your car is up as collateral on the loan. 

What that means is, Embassy Loans or any other title loan provider will have the legal authority to seize your vehicle in the event of missed payments. Your car may be sold on to cover the balance of the loan, and it may not be recoverable to you. 

Additionally, many auto title Loans carry late payment penalties that can increase the total balance on the loan. It’s essential to pay down the interest or you may find yourself with a larger debt than you began with. 

Give Embassy Loans a Call for More Information

Interested in learning more about the ins and outs of auto title loans? Call Embassy Loans to speak with a rep about any title loan questions you may have. They’ll take you through the nuances of the borrowing process and give you an idea of what to expect moving forward. 

Give Embassy Loans a call and get started on managing debt with a title loan today.