When you’re in need of a loan, title loan companies are a popular option. There are several benefits of car title loans in Texas that may make them a good idea for your situation. Here are the primary reasons to go the title loan route:
1. You Don’t Need to Worry About Your Credit Score
Your credit score is a three-digit number ranging from 300 to 850 which essentially rates your worthiness as a borrower. If you’ve demonstrated good financial habits in the past, then those will lead to a good credit score. If you’ve had some financial missteps, then you could have a poor credit score.
Keep in mind though that having little credit history can be just as bad as having bad credit history. And if you’re the type of person who doesn’t use credit cards or get loans very often, you may not have built up a credit history yet.
With traditional lenders, your credit score will be of paramount importance. They’ll have minimum requirements, and failing to meet those requirements means they’ll likely deny your loan application. Even if you get a loan with a bad credit score, lenders set up loans with high interest rates for riskier borrowers.
When you go to a title loan company, your credit score won’t matter at all. The title loan application process doesn’t involve a credit check, which means the lender won’t even see your score. The only important factor is the current market value of your car. If you were hoping to find bad credit Texas tile loans, the good news is that all title loans are an option even with bad credit.
By the way, when a traditional lender checks your credit, the hard inquiry can negatively affect your score. Because a title loan company doesn’t run a credit check, there’s no impact on your score.
2. The Application Process Is Fast and Convenient
Another benefit of car title loans in Texas is the application process. Let’s take a look at the difference between the application process for a personal loan through a bank and a title loan.
When you go to the bank for a loan, they’re going to want all kinds of information from you. We already went over the credit check, but they will also want to see financial records and proof of income. You’ll need to spend some time getting the required documentation ready.
After you apply for the loan, it could take days or even weeks before the bank decides whether to approve it. If you’re approved, you’ll likely need to wait another few days before you have your money.
When you go to a title loan company, you need just three things with you:
• The car, which must be owned by you
• The title to your car, which must be lien-free
• A form of government-issued ID so the lender can make sure you’re at least 18 years old
All of those are easy enough to find, especially since you probably already have them any time you drive somewhere.
Once you’re at the title loan company’s office, you only need to fill out some brief paperwork and allow them to perform a short inspection of your vehicle. Then, you can hand the title over and get the money for your loan.
How long will that take? If the title loan company isn’t too busy when you arrive, you’re probably looking at an hour or less before you’re out of there.
3. You Will Still Have Your Car During the Term of the Title Loan
As convenient as a title loan is, it wouldn’t be very convenient if you were stuck without a car while paying back the loan. That’s not anything to worry about.
The title loan company will only have your car title during the loan’s repayment period. Your car stays with you, which means you can still drive it to get to work, school or anywhere else you need to go, just like normal.
Your title loan won’t inconvenience your life in any way. And as soon as you’ve paid your loan back in full, the title loan company will return your title to you.
4. You Can Borrow a Large Amount of Money
With a traditional loan, the amount you can borrow would be limited by your credit score and your income. The benefit of car title loans in Texas is that it's your car’s value that determines how much you can borrow.
The title loan company will enter your car’s information in a vehicle value guide to find out how much a car of that year, make, model and mileage is worth. They will then perform that vehicle inspection to evaluate the condition of your car and verify its value.
Title loan companies are typically willing to lend you anywhere between 30 and 50 percent of your car’s value. Title loan laws in Texas don’t put any restriction on title loan amounts, which means you could get a loan for as much as you need, provided your car is worth enough.
5. Find the Right Title Loan Company and You Won’t Pay Any Interest
Believe it or not, you can score a loan today and not pay any interest on it. All you need to do is go to one of the many lenders offering zero percent Texas title loans.
As you’d expect, these loans won’t have a zero percent interest rate indefinitely, as no lender could stay in business offering that. But they do have zero percent interest if you pay them off within a certain time period, which will be clearly explained to you by the lender and in your title loan contract.
If you’re confident that you’ll be able to pay off your loan within that introductory period, then you should definitely choose a lender that offers these types of loans.
6. Extending a Title Loan Is Just as Easy as Getting One
Sometimes borrowers end up unable to pay off their title loans on the due date. With a standard term loan, being unable to make your payment is a serious issue, and payment terms usually aren’t flexible. Title loans are much different.
If you can’t make your full payment on the due date, you also have the option of extending your loan for another term of the same length. Just pay the interest on the loan, and you’ll start a new term with the unpaid principal and another interest charge. You pay a bit more for this convenience, but it’s a simple solution if you’re short on cash.
Each of these is just one benefit of car title loans in Texas, but they all give title loans a significant advantage over other types of loans. When you take all these benefits together, it’s clear that a title loan is an excellent option for anyone in Texas who needs quick cash and has a car that they can put up as collateral.