The Difference between Pawning your Phoenix Car Title and Obtaining a Car Title Loan
Let’s face it, it can happy to all of us, your paycheck is gone and there are so many bills left to pay, or you have a financial emergency popping up, but no emergency fund. What do you do? You could apply for a credit card or a regular loan, hope you qualify for the amount you need and then pay it back, knowing that if you default on your loan, your credit will be shot. But there really aren’t any other options, or are there? Well there are a few valid options, you can try.
When you find yourself in need of money, your car or truck (or even motorcycle) can really help you out. For one you can pawn your car title or you can get a car title loan. If you are unsure about what the difference is, read on. Below you will find everything you need to know about the difference between pawning your title and getting a car title loan.
Here is the skinny on getting money for your car title:
Pawning Your Car Title with a Car Title Loan Company
In order to pawn your car title with your local car title loan company such as TitleMax, for example, you need your car (duh), the lien-free title to your car, government issued ID or Driver’s License and possible proof of income.
While some title companies are okay with other liens or loans on the title, most want the title to be free of everything. Proof of income can be anything from your paycheck, to alimony, social security payments and the like. Some companies also want proof of residence, meaning you need to show a utility or power bill.
How much you can expect in exchange for your car title, when you pawn your car depends on the year, make,model and of course, condition of your car. A car title pawn expert will appraise your car and give you a pawn loan based on the findings.
A car title company will add interest to your loan and you may have to carry additional insurance for the duration of the time you are paying on the car title loan. Payments are usually made monthly until the balance of the loan is paid off. Generally speaking, you get to keep driving your car, which is where the extra insurance comes into play, because the title company wants to be sure that their collateral (your car, truck, motorcycle) is well protected.
Getting a Car Title Loan
Another way to get cash fast, when you need is to get a car title loan. Depending on the condition, year, make, model, Kelly Blue Book value and you will be able to leave with cash in no time at all. That is, if your car is paid off and no lien is on the title. Some title companies even give you a car title loan if you already have a loan with another title company by refinancing it. This means your preexisting loan will be paid off and the new loan take its place, it’s kind of like trading in your old car on which you are still making payments.
One drawback to title loans can be that they require to be paid in a short period of time, 30 days are about average. Also, the interest rates will be higher as they are if you turn to other sources of credits. Some companies let you get title loans for as little as $100 while others require a minimum loan amount of $1000 on car title loans. Your credit score is of no big importance, which makes them suitable for applicants with less than stellar credit scores.
An interesting side note is that car title loans are not available in all states and some even consider them to be illegal claiming they are practicing “predatory lending”. Alabama, Arizona, California, Delaware, Georgia, Idaho, Illinois, Kansas, Louisiana, Mississippi, Missouri, Nevada, New Mexico, Ohio, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wisconsin are the states allowing car title loans.
Pawning your Car with Your Local Pawn Shop
Of course, you can always pawn your car with your local pawn shop. This will give you the benefit of having decent interest rates, and if you fail to pay back your pawn loan, your credit score won’t be affected, though you probably will lose your car. However, pawn shops usually have decent payment terms and let you extend your loan as well. In order to obtain a pawn loan, you have to be 18 or older and have a government issued ID such as a driver’s license. In contrast to pawning your title with a title company, your pawn broker will take possession of your vehicle for the duration of the pawn loan. Your vehicle will be stored in a secure and safe location such as a warehouse and monitored by a top security system.
Once the loan has been repaid (during the agreed upon time) you will receive your car or repawn it. Usually, there is no penalty for paying your loan off early.
Pawning a car (if you don’t need one to drive around in) with a local Phoenix pawn broker, is definitely the way to go. The terms are good and your credit won’t suffer in case you cannot repay the loan. Just be very sure that you don’t need the car.
A title company may also take possession of your car if the pawn or title loan is not paid back in the agreed upon time frame, but they often use it as a last resort as locating and repossessing your vehicle can be a real hassle (and expense) for them.
If you find yourself in need of fast cash, all three options can help you to get through financially challenging times. To learn more about our pawn loans and how we can help you to get cash fast, contact us today. Private Pawn has been providing pawn loans to the greater Phoenix metro area for many years.
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