Auto Title Loan: Is It A Form Of Credit?

Having undesirable interests when borrowing money from traditional lenders, like the bank or credit union, has made many people opt for auto title loans. Lenders offering short-term loans such as these can be easily found online and in storefront locations as well.

It is extremely easy to apply for Canadian Title Loans or car title loans. Applying on line or in stores requires very little information as well as the applicant’s employment status, contact information, and his/her monthly earnings. It is obligatory, in most cases, for borrowers to have a checking account with their paycheck’s direct deposit, for lenders to receive loan payments from borrowers.

Depending on the borrower’s state of living, one can borrow a loan amounting to $5,000. Moreover, States autonomously put caps on how much the lender can loan and the value of the truck or car. The borrower is obliged to hand over the Title or “pink slip” for the truck/car which acts as security for the applied loan. The lender has a right of repossessing the car or truck if the borrower is unable to repay his/her loan.

Canadian Title Loans have very many attractive aspects. The most striking aspect is the ease and amount in which they’re given. An applicant’s credit score is never part of the loan procedure. In other words, lenders never run your credit history before approving you for a loan. This is the main reason why most consumers having bad, little or no credit find these types of loans appealing.

Since credit history isn’t considered in the loan application, it is never part of the repayment procedure. When you take out credit in form of an auto loan, mortgage or credit card, your payment history normally goes on file with all three credit bureaus. Your repayment responsibility will determine your credit score as well.