Atlanta title loans are popular because the application process is quick and easy. In most cases, you can fill out the application form and receive the money on the same day. Title loans have more flexible repayment terms, not to mention that you can borrow up to your car’s value. You could be wondering whether taking a title loan affects your credit; here’s how it might.
How Do Car Loans Work?
Before taking a title loan, you need to show the lender proof of ownership of a car, the car itself, and your license. What follows is the approval process. If successful, you will hand over the car title to your lender in exchange for the money you need. Typically, title loans have terms of 30 days, though that might change depending on the lender. So in most cases, you make one bulk payment at the end of the 30 days. Notably, Atlanta title loans’ annual percentage rate (APR) is higher than standard loans.
Minimal Credit Impact
The straight answer is that a title loan will have little effect on your credit. The loan will be reported to credit bureaus if your car gets repossessed. In that case, your credit score will be affected negatively.
Making your loan repayments on time will not improve your credit score. That’s because a title loan is not a standard loan. The difference between a title loan and a standard loan is that the former is secured. That means you need collateral to get one.
On the other hand, no unsecured loans require you to give the lender collateral. All that matters is your creditworthiness. You would need a cosigner to get the loan if you have low or no credit.
What Happens if You Default Payment?
The consequences of defaulting on your title loan depend on your lender. Some lenders roll your old loan into a new one, which translates to paying more. Others offer your car for repossession, but that’s not as common.
When to Get Atlanta Title Loans
Atlanta title loans help when you are in a tight situation that requires you to have money immediately. It could be an accident, a medical emergency, or paying a long-due utility surcharge to avoid imposition or penalties. With a title loan, you don’t have to sell your possessions or borrow from friends and family.
Contrary to popular belief, the lender does not confiscate your car during the loan period. Your car is only used as an indemnity against your money. In the meantime, you are free to drive it around.
Finding a Reputable Lender
Although you need the money fast, it’s important to do research on the best lenders. Be familiar with everything the process entails. Besides comparing the interest rates of different lenders, check other terms of the contract, like what happens if you don’t repay on time. You might also consider going through testimonials about the lender on the internet to get an idea of the customer experience to expect. Find Atlanta title loans near you today!