How Do Title Loans Work?

Title loans are nothing but loans that are taken by a person by pledging the title of his car or any vehicle as a collateral. The basic formality or requirement for this loan, whether for business or personal use, is just the vehicle and its value and working condition. Nothing like a credit report or anything else is demanded, which is the case with the other types of common loans like personal loans, home loans etc lent by the banks and other financial institutions.

All of us know about how a common loan works. Here is a gist of how a title loan works. The lender is vested with the title rights of a vehicle, either a car, a truck or a motorcycle actually in the name of the borrower. This title rights remain with the lender until the repayment of the loan amount and the period that is given to the borrower for the full repayment is just 30 days. Obtaining a title loan is very simple and it can be either done online or by approaching a store in person.

Generally, the borrower is supposed to come with a loan application along with a photo ID. Some lenders demand a photo of the vehicle under pledge and few others would also want to have a personal look at them to examine and rate their performance and working conditions. Once this is done they come to an agreement on the amount to be lent and borrowed. On doing this the lender would demand the borrower to sign an agreement wherein the borrower agrees to transfer the title of his vehicle to the lender until the entire amount is repaid. On signing this the title gets transferred to the lender and the borrower gets the amount in the name of the loan. This is a simple process that helps in acquiring a title loan.