Liens and Auto Title Loans

 
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Liens and Auto Title Loans

Turn Your Automobile into the Asset It Can Be

Traditionally we have always thought that if we owned a home, and we have been paying against it, then we could use that money we paid (equity) to get a loan, yet with home prices all over the place, it’s not as easy as it should be. Smartly, people are starting to remember that they have another major asset—their car. If they could only pull the money out of that investment it would be so much easier… Well, they are right. We made it happen.

If you own a vehicle, then you have the option to use the title as collateral to borrow money. Simply put, this gives you the chance to take out the money you’ve invested in your car without having to sell it.

At LoanMart, we can place a lien on a customer’s car, truck, or SUV to help them receive a title loan. We are eager to help those who need money for tough emergency situations. Our auto title loan process is simple and easy to complete. Our team and our customer service representatives are committed to helping you understand everything about liens and auto title loans to help you find the best option for a bad financial situation.

If you are approved for a loan, LoanMart will hold the title to your car and be signed on as the lienholder until the loan is paid in full. Terms of repayment are set before the loan is signed, and your input is a valuable part of setting up your loan agreement. We always prefer to customize the loan terms for our customers so they can repay the loan easily without any anxiety 1. We want to make this work for both of us.

Here are the specifics of how our process—and every lender’s process—works:

An Unsecured Loan vs. a Secured Loan

There are two different categories of loans. All lending falls into one of the two categories of either secured loans or unsecured loans.

An unsecured loan is not backed up by any type of collateral but rather based on the credit score or decided trustworthiness of the borrower. Since the loan is not directly connected to any collateral, if you default on the loan, the lender can’t automatically take any of your property (though it is still possible). Without any asset tied to the loan, a lender would consider this a greater risk. Therefore, interest rates on these types of loans are considerably higher. Because of the process to get these loans are greater, funding is not as speedy as people usually need. The most common types of unsecured loans:

  • Student loans
  • Personal loans
  • Credit cards

A secured loan, however, is connected to a particular piece of collateral that is usually something valuable like a vehicle or a house. Some of the most common types of secured loans are mortgages and car title loans.

The lending company or bank will hold the deed of the house or title of the car until the loan has been paid in full, including interest and any additional fees. Other assets like stocks, bonds, or valuable personal property can be put up to secure a loan as well. Secured loans can offer much higher borrowing limits than unsecured loans, though just because you may qualify for a larger amount, doesn’t mean you should take it. You still need to be careful to only borrow what you can afford. The most common types of secured loans:

  • Mortgage on a house
  • Financing on the new purchase of a car
  • Auto title loans like those offered at LoanMart

Credit Reporting

Many lenders will report to major credit reporting agencies. Late payments and defaults on loans can be reflected in your credit report. With secured loans, repossession or foreclosure can not only affect your everyday life, but they can also negatively affect your credit score in addition to payment history. Making on-time payments and paying off the loan can potentially help you on your credit file.

Understanding Collateral and Liens

When going with a secured loan, it’s important to understand these terms.

lien is any official claim or charge on a piece of property, known as collateral, for payment of a debt owed or for some agreed upon service. A lien is usually in the form of a legal document that is signed by the one who is owed money in addition to the one who owes the money and is agreeing to the amount to be repaid. With a lien comes the right to sell the property if the contract is broken, in order to recover the money if necessary.

Putting a lien on a piece of property is a way of legally enforcing collateral through claiming partial or complete ownership of it. A lienholder is a legal owner of an item used as collateral. If the repayment terms on the lien and therefore on the loan are met, the lender will release the lien. After that, they will no longer have any legal claim or ownership to the property.

For example, in a car title loan, your automobile is used as collateral to secure the funds you need. LoanMart would then be the lienholder on the automobile and our name will appear on your title. Once the loan has been paid in full, the lien is completely released, along with the ownership of the car back to you. There is no need for you to worry about us staying on your title after the title loan is repaid.

Repossession

If you default on your payments and fail to make arrangements, your collateral (your car) may be repossessed and sold so that the lender can attempt to get their money back. At LoanMart, we are committed to working with you to avoid this situation.

We work with you upfront to get you the best terms on your loan so that you will be able to make smooth payments that are tailored to your lifestyle. Still, we understand that things happen. So, if you are in a bind and can’t make your payments, give us a call to discuss your options.

Once your loan has been paid in full, your car will legally belong to you once again, free and clear of any obligations.

Payment Terms that Work for You

We want to make sure that an auto title loan is the right option for all of our customers. During your application process, we’ll address any questions and concerns you may have and discuss repayment terms in a transparent and honest manner. We strive to educate our customers on the important details of borrowing money. We want to make sure you have a good experience when borrowing from us; because when you do, we can be sure that we will be your number one choice if you are ever in financial need again.

At LoanMart, we are here to help if you are in a bind and not sure where to turn. Our friendly representatives are standing by ready to assist you in turning your valuable asset into the funds you need. Call or chat to kick off your funding experience.

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