A title pawn loan is a type of financing issued to a qualified car owner and secured by a vehicle that the borrower owns. Sometimes called a pink slip loan or car title loan, the key feature of the title pawn loan is the requirement to provide the vehicle’s title to the title pawn lender – as security for the title pawn loan.
A title pawn loan can be issued on almost any vehicle that has sufficient fair market value, as long as it meets the lenders guidelines – and is allowed by the state in which the borrower and vehicle resides. Title pawn loans can be made on automobiles, boats, vans and motorcycles, as well as many types of commercial vehicles.
A title pawn is a type of secured loan, which requires some sort of collateral for the loan. By comparison, a non-secured or unsecured loan, such as signature loans or payday loans, requires no additional collateral.
One advantage offered by title pawn loans is that borrowers with damaged credit may still qualify for financing approval. Most title pawn loan providers will still review the borrower’s credit history or FICO scores. However, because the loan is secured by the vehicle’s title, many title pawn lenders may still approve borrowers with less-than-perfect credit.
The two main requirements for many title pawn loan borrowers are the following:
Although borrowers can drive to a title pawn lender to complete and process the application, many title loan lenders are now able to conduct almost all their lending online. Borrowers can complete the online title pawn loan application from the convenience and comfort of their home or office. Upon full approval, the title pawn loan funds are typically transferred to the borrower’s bank account within one business day.
At the end of the loan term – and after the loan has been paid in full – the lender will return the title to the borrower, releasing all interest in the pledged vehicle. Title pawns can be for any agreed-upon period but most title pawn loans will last from six months to four years.
Title pawn loans are not for every consumer. But for individuals who need quick access to larger consumer loan amounts – and own their vehicle “free and clear” – title pawn loans offer one more personal financing option to consider.
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