Thinking of taking out a title loan or registration loan? Here is what you should know
Driving is such a great privilege to be allowed to enjoy as an adult. Whether you own a nice newer vehicle, lease a nice newer vehicle or own an older vehicle it goes without saying you have a sense of power when you are behind the wheel. You can go wherever you like, take friends and family for rides or out for dinner, and no longer have to rely on public transportation or taxis to get your shopping done. But what happens when you find yourself in desperate need of cash in between pay checks? You can probably qualify for auto registration loans. What is an auto registration loan and what makes it different then a title loan?
Title loans are a collateral type loan where the loaner will keep the title to your vehicle until you can return the money borrowed with interest. Your vehicle can not have any kind of lien on it and cannot be a financed vehicle. When you have paid off the loan you will receive the title back and there will be nothing more to worry about. If you can’t pay back the loan, skip out on the loan, or can’t make the minimum payment to reinstate your loan for a longer borrowing period the lender can keep your vehicle.
Auto registration loans are a little bit different in a couple ways. These loans offer quick cash if you have a vehicle registered in your name. They have no high interest rates and the lender will not put a lien on your vehicle during the loan period. You can use financed vehicles for registration loans so if your leasing it’s no problem. These loans don’t go based on your credit history either making them a simple loan to take out but if there’s issues paying back you could face some serious consequences. Auto registration loans can be risky for lenders as they have no collateral to pay back the money you borrowed. If this is ever the case they will come after any other assets in your name to get their money back.
If you find yourself needing any loan money be sure it is used for bill payments, groceries, diapers, or other very important things. The top three reasons people take out a loan is for vehicle expenses, bills, or personal emergencies. Never use a title loan or registration loan to go shopping for yourself. Loans are very serious business and f they are not paid back they can cause serious harm to your credit score making life harder down the road then it would be if you had just paid everything off the way you were supposed to.
