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Pros and Cons Auto Title Loans Florida

Jun 24, 2021

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No matter how great financial plans and saving cultures of individuals are, some expenses can hit unexpectedly and can cause distress if not quickly tackled. In this type of situation, many people turn to short-term loans such as auto title loans. 

 

With auto title loans Florida, car owners can get loans using their vehicles as collateral. Although auto title loans seem like great ways of getting good funding, it is often recommended that individuals explore other funding options. 

 

However, if you must use auto title loans using your car as collateral, it is important you to know more about the pros and cons. In this article, we will explain the pros of car title loans as well as the drawbacks. Before then, here are the simple steps to obtain auto title loans Florida; 

 

  • Apply: This is the first step. Show interest in obtaining a car title loan and supply all the information required.
  • Submit documents: There is a list of documents borrowers must submit to access funding in auto title loans, these include vehicle documents, proof of residence, income proof, tax payment, and others.
  • Find out of you are eligible: Not every applicant is eligible for auto title loans Florida, check out eligibility with the lender. 
  • Receive Funding: If you are eligible and your loan application approved, the next is to receive funding.

 

Pros of Title Loans

 

1. Fast Cash/ Quick payout

This is the most attractive benefit of auto title loans Florida. Borrowers can access loans faster and get funding once they complete the loan application process and the application received approval. Auto title loans are easier to access and offer much more convenience. 

 

2. Anyone can get a loan, even with bad credits


It is easier for individuals with bad credit scores to get funding in auto title loans than any other type of loan. This is because the loan is not issued based on credit history but on the value of the value. Fewer credit checks are carried out, neither do borrowers need to fill bulky paperwork before accessing funding.

 

3. Borrowers get to keep and drive the vehicle during the loan period


The fact that borrowers get to keep their car and cruise it around despite being used as collateral in an auto loan is one of the brightest sides of this type of loan. As long as repayments are made when due, borrowers do not have any worries on losing the vehicle. 

 

Cons of Title Loans

 

1. Short Loan period 

 

Auto title loans are short-term loans, usually 30 days. Although it can be extended, the longer the loan period, the higher the interest rates. 

 

2.High Interest Rates and fees


Car title loans come with high-interest rates and lender fees, which may increase if the lean term extends. In Florida, there is a cap of 30% to be charged on these loans. But some lenders offer slightly lower interests to stay competitive. 

 

3. Risk of Losing Car


For borrowers that cannot meet up with the repayment plan, there is possibility of losing the vehicle to the lender. Lenders have the right to repossess collaterals, sell them off to recoup the loan amount from the proceeds. The balance from the sale is given back to the borrower. 

 

It is important you properly evaluate your decision to use car title loans, explore other funding options first.