If you’re in the midst of a financial emergency, getting a car title loan in Arizona is one quick way to solve your immediate financial needs. For people who do not have sufficient credit for a traditional loan, auto title loans can be beneficial for those who need some quick cash. Car title loans do not require credit checks or income verification. Instead, the title loan is secured by the vehicle title of the borrower and the loan amount is based on the equity in your vehicle.
Loans come in many forms, and once approved, are a legal commitment by the borrower. Title loans are convenient. However, before applying for a loan, have a purpose and know what kind of loan works best for you. As you consider a car title loans in Arizona, here’s a primer on loans in general:
When Applying for a Loan, Have a Purpose
Loans work best if you have a purpose for acquiring a loan in the first place. Many types of loans are available. There are school loans, mortgages, personal loans, payday loans and car loans to name a few. Whatever your financial need, borrowers can find loans to fulfill their financial needs. The reality is that each loan varies relating to the intended use of the borrower. Depending on the loan, terms and conditions are determined by the length of the loan, the interest rates, and even the day payments are due each month.
Kind of Loans
Loans are offered in many forms and how they work is important to know. Some loans may be open-ended or closed-ended, others are secured or unsecured loans. You can borrow over and over with an open-ended loan. These include lines of credit and credit cards. On the other hand, closed-ended loans are for a specific amount. Once repaid, the loan does not automatically renew. Secured loans are loans that rely on an asset as collateral. Car title loans are a very good example of a secured loan. It’s important to note that if a borrower happened to fall behind or default on a secured loan, the lender has the option to take possession of the collateral to cover the loss of the loan. An unsecured loan does not require collateral but generally has higher interest rates. The borrower can also be liable to pay any fees outlined in the agreement.
Before accepting a loan, be sure to know the interest rate and ask the lender about the annual percentage rate (APR) on their loans. Some lenders will charge as much as 25 percent of the borrowed amount. Annual percentage rate (APR) lets borrowers know how much it will cost to lend money to them for one year. By law, lenders must inform borrowers of the APR and the overall cost of the loan.
How Do Car Title Loans Work?
Now that you know about loans, and have a purpose, let’s take a closer look at the workings of title loans. It’s easy to apply, and if you live in Arizona or, for that matter, Nevada, auto title loans are widely accessible.
Car title loans are actually available on any vehicle you own. You can use your title on a motorcycle, pickup truck, RV and auto for collateral. No matter your credit status, even if you have a lien, if you’ve ever been in a situation where you need a quick sum of money for a short period, a title loan is a fast and convenient solution.
Take the time to shop because where you decide to go to apply is important. Car title loans are secured loans generally for a relatively small amount of money borrowed over a short period of time. Giving the car title to the lender as collateral means you could lose it if you do not meet the terms of the loan.
Do your diligence and research, work with the lender, and know what you’re getting yourself into. Car title loans in Arizona are regulated—one of nine states that have enforced a cap on title loan interest rate. Find out what that is from the lender and you will be in a good position to get the best deal on your loan.