An adverse credit history makes getting approval for an emergency cash advance far more difficult as the majority of lenders use a process known as credit scoring. Past indiscretions are reported to credit reference agencies so, when the risk of default is assessed, this invariably leads to a decline. However, a cobra payday loan allows the customer to borrow money by putting up their car, motorcycle, boat or truck up as collateral. The process is very similar to that offered by a pawnbroker, but it is possible to get a far larger fast and easy loan with no credit checks.
Criteria for a Title Loan on Cars
- Must be a minimum of 18-years old and have a valid driving licence.
- Although it isn’t always necessary to be employed, the customer will need to demonstrate that they are in a position to make the monthly repayments.
- Any outstanding credit on the vehicle will need to be at least 75% cleared.
- It is necessary to provide the lender will all relevant ownership documentation.
How Bad Credit Car Title Loans Work
The value of the vehicle will normally be assessed using the Kelly Blue Book to establish how much equity is available. Some lenders perform their own valuations. A maximum cash loan for car title will be determined, typically 25% to 50% of the vehicles value. Subject to meeting the eligibility criteria, it is possible to get a fast and easy loan within as little as 1 hour. The customer signs the necessary paperwork, hands over the car title and may need to provide a copy of the keys. Provided that the repayment schedule is maintained for the full duration, the owner continues to use their vehicle without any further problems.
Repaying a Logbook Loan with No Credit Checks
A title loan on cars will only normally be for a short period of time, typically just 30 to 45 days. If the customer is unable to repay the money owed, it may be possible to extend the borrowing term. In Oregon in 2002, 19% of all car title loans were renewed at least 6 times before being eventually cleared. Although rates will vary between lenders, the annual APR on a bad credit car title loan is normally about 300%. However, certain states have established their own legal guidelines. The maximum annual APR in Iowa and New Hampshire has been capped at just 35% and 36%, respectively. Some states have banned them completely.
Consequences of Failing to Repay a Cash Loan for Car Title
A maximum emergency cash advance value is determined for a reason. As is the case with any source of secured borrowing, failing to keep-up with the repayment schedule for any title loan on cars will ultimately lead to repossession. The vehicle will be sold to recover the principal and any interest that has accrued. Any profit belongs to the lender. Others will take the customer to court to recover their money and add any legal costs to the total amount owed.