An auto title loan allows you to raise finance using your car. This means that you can borrow money by putting your car up as collateral. The lender retains the title of your car until your loan is duly repaid. As with all other types of loans, an auto title loan has certain benefits and drawbacks.

Pros

• You can get quick cash. If you are a car owner and draw a paycheck, getting an auto title loan is easy. You can even apply for one online; the only things you require are your driver’s license, proof of residence such as an electricity bill, and your last pay slip. Once your title of the car is verified, your loan is approved. You can get the money in hand within 24 hours.

• Your credit history does not matter. Typically, lenders do not approve loans to applicants with a bad credit history. However, with an auto title loan, bad credit is not a disqualifying factor. This makes it ideal for people with such a record.

• You can continue using your car. The car remains in your possession during the repayment period, even while you are still paying back the loan.

Cons

• You could be deceived. The idea of ready cash projected by these loans is very attractive. It may induce you to go in for them without anticipating the actual risks involved.

• You pay higher interest. An auto title loan generally carries high interest rates. Besides, every time the date of repayment is extended, this rate rises. Overtime, your total debt may be much more than your original loan.

• You could lose your car. In case of failure to repay, the lender is entitled to sell off your car to recover his dues. In this case, the lender also keeps the excess over and above your debt amount. While this is a worst-case scenario, it is a real risk.

Alisha Delphi holds a degree in Economics and Commerce from USC. She started out as a financial advisor with a bank and has moved on to become a loan consultant with more than ten years of experience. Apply for fast cash loans application now.

CHICAGO - Illinois is getting tougher on car title lenders who charge sky-high interest rates.

New rules, announced Wednesday, affect an industry that has gone largely unchecked by consumer protections. Borrowers fell behind on payments and saw their cars towed away.

The state tried in 2001 to set rules for title loans up to 60 days. But the industry changed loan terms to 61 days or longer to avoid the consumer protections.

The new rules would restrict loans to $4,000 and prevent them from being refinanced more than twice. The “60-day” language was removed.

“Car title loans snare victims at 300% rates” reads the headline in one of the page 1 lead stories, at the top right corner of that page in the Midwest Edition of the Sunday Tribune. The story, written by Tribune reporter Stephen Franklin, is one of the paper’s “CASHED OUT” series, described as “an occasional series reporting on the growing number of Americans who, for the first time in decades, can’t make ends meet, let alone get ahead.”

The 30-paragraph story continues on page 14, where a two-column, black-and-white photograph shows Ledford standing in front of the rear license plate area of his 2003 Dodge Neon, in the garage of his South Side home. The caption reads: Joe Ledford keeps his car out of sight in his Pontiac, Ill., garage so that a loan company cannot repossess it.” The photo was taken by Tribune photographer Zbigniew Bzdak.

The story notes that 16 states permit high-interest auto loans, and that Illinois is the only state with no limit on interest rates lenders can charge.

Ledford’s situation is described in the last five paragraphs of the story, the first reading: “And then there’s Joe Ledford of Pontiac, Ill., whose debt problems have trapped his car.”

Ledford, 30, is on Social Security disability benefits, the story says, and took out a $965 loan at 304 percent annual interest in July 2006 with Title Cash of Illinois. Reporter Franklin writes that the company is owned by an Alabama-based firm with 330 stores in 13 states.

That $965 loan would have worked out to $1,688 in payments over three months, Ledford did not have enough money for the final payment of $1,206, “and the loan has swollen,” Franklin writes.

“Ledford said he has tried to reach a compromise,” the story says, but quotes the regional manager for the company as saying that Ledford has “not made a sincere” attempt.

During a photo shoot Monday to replicate the Tribune photograph, Ledford told a Daily Leader reporter that the main reason he agreed to be interviewed by the newspaper was to let others know about the high-interest loans and prevent what has happened to him happen to others.

He’d also like to see more attention on the subject, maybe from politicians, including local ones.

He said he wants them and others to know how such loans can affect people with disabilities, especially on Social Security disability, and he hopes for some protection for consumers in the car title loan area.

“If I can help someone else, that’s what I want to do,” he said.

You need to make an urgent payment but you don’t have the entire amount with you. There’s no way to get a loan that quickly and you don’t want to ask family or friends to give you the money. So what do you do? Well, if you live in California and own a car, you can try California auto title loans.

What are California auto title loans?

California auto title loans are emergency loans you can avail of from a loan agent licensed in the state of California. As a borrower, you can use your own vehicle as collateral.

According to the California Department of Financial Institutions, auto title loans are only meant for consumers who require short-term loans, usually lasting from 15 days to 3 months. The maximum loan amount varies between lenders but is never greater than 80% of the value of your vehicle.

How do I apply for an auto title loan?

California auto title loans are easy to apply for. You can walk into the lender’s office directly or apply for a loan online. When you apply for a loan, the only documentation you need to submit is a copy of your vehicle title and vehicle insurance papers, in addition to proof of ID. The lender checks your details, and if satisfied, approves the loan at once.

What is the advantage of an auto title loan?

Convenience is the primary advantage of California auto title loans. Lenders approve loans within a matter of few hours if the applicant’s documentation checks out. The money is immediately transferred to your account or you can get it in the form of a cashier’s check.

Another advantage is time. Since these are short-term loans, you don’t have to struggle with complicated calculations involving monthly installments. In addition, most lenders will still consider you for a loan even if you have bad credit history.

Alisha Delphi holds a degree in Economics and Commerce from USC. She started out as a financial advisor with a bank and has moved on to become a loan consultant with more than ten years of experience. Her key areas are auto title loans, auto pawn and fast cash loans.

Rob’s old car stopped working and he urgently had to buy a new one. The only problem was that he didn’t have the entire amount to make his purchase. He was falling short by $2,000. Then, Rob heard about title loans in California, which would allow his new car to pay for itself. To find out how this is possible, read on.

What is a title loan?
In a title loan, you use a vehicle you own as collateral. You literally hand over the title of your vehicle to the lender and he provides a loan in return. Title loans in California can be granted for a vehicle you already own or for one you are intending to purchase.

How does a title loan help me?
Title loans are the ultimate in convenient financing. The only requirement to qualify for a title loan is a vehicle with the proper ownership papers. This means you are eligible for a loan even if you have bad credit history. A second advantage of title loans in California is their short-term nature. The average loan period ranges from 15 days to 3 months.

At the end of the loan period, you simply make a balloon payment, which includes the initial loan amount, interest due, and loan fees. This payment system saves you the hassle of complicated interest calculations and keeping track of monthly payments.

What do I need to know while applying for a loan?
Like all loans, there is an element of caution involved in applying for a title loan. Ensure your lender is licensed to practice in the state of California. Another factor to consider is the interest rate. Because title loans in California are given for short periods and do not rely on the credit history of the borrower, they are classified as high-risk loans. Thus, a title loan has a higher rate of interest than a traditional bank loan.

Alisha Delphi holds a degree in Economics and Commerce from USC. She started out as a financial advisor with a bank and has moved on to become a loan consultant with more than ten years of experience. Her key areas are auto title loans, auto pawn and fast cash loans.