Car Title Collateral Loans

Car Title Collateral Loans

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Can using your car title as collateral help you get a loan? Typically yes it can. The reason is simple. You are securing a loan using your car title as collateral. This means that the lender holds the title to you car until you pay the loan off. Even though the lender holds the title, you still have use of the car as you make payments.

This is known as a secured loan. The car title loans lender now has some security when it comes to getting his money back. This is unlike a payday loan in which there is no security given. That is why a car title loan has a lower interest rate. You have pledged your car as collateral.

Even if you have bad credit, using your car as collateral can help you get a loan. A lender is more concerned about the value of your car and your monthly income than your past credit history. Generally a lender won’t even pull our credit report or credit score. As long as your car is worth more than $4,000 and you have an income, you can use your car as collateral to get a loan.

By using a money loan using your car as collateral, it may improve your credit. Pay on time and pay it off when due and it can only help your credit score. So yes, getting a car title loan can help your credit.

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