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What does a title loan consist of?

Leia Doyle

What does a title loan consist of?

The most common form of a title loan is a car title loan. In this case, a potential borrower is required to own a car outright and sign the title over to an auto loan title company. The loan company will lend up to 25% of the car’s total value to the borrower and keep the car’s title as collateral in case of default.

What are two dangers of using a title loan?

The danger with car title loans is that they’re very expensive and have such a short repayment window. If you can’t repay the loan, rolling it over means racking up more fees and interest. That makes it even harder to repay the loan, a vicious cycle that could end up with you losing your car.

Can a title loan hurt your credit?

Does a Title Loan Affect My Credit Scores? In most cases, a title loan won’t have any impact on your credit scores. That can be good and bad. On the flip side, title lenders don’t report your payments to the credit bureaus, which means a title loan won’t help your credit scores either.

Do TitleMax repos go on your credit?

Does TitleMax run your credit? Because of the value of the title, you can typically get thousands of dollars on your loan right away. Plus, you can borrow money with bad credit. At TitleMax®, a secured auto title loan does not usually require a credit check.

What happens after TitleMax repos your car?

Generally, you can get your vehicle back either by reinstatement or redemption. To reinstate your loan after repossession, you’ll need to bring your loan current by paying all amounts owed, plus any additional fees such as late payment fees and the cost of the repo. This may not be an option in every case.

Does TitleMax go on your credit?

In most cases, a title loan won’t have any impact on your credit scores. That can be good and bad. For starters, most title lenders don’t run a credit check when you apply. On the flip side, title lenders don’t report your payments to the credit bureaus, which means a title loan won’t help your credit scores either.