When people think of loans, they often think of things like mortgages and car loans, but there is another common type of loan. It has a number of different names, for example:
- Small Loan
- Personal Loan
- Short-Term Loan
Unlike mortgage lenders, many small loan lenders exist entirely online. This means you can get a loan without ever having to leave your house. And you can choose from countless lenders. You’ll want to be careful about which lender you do choose however. They may appear to be offering you a good deal, but if your lender is based in another country, you may have trouble contacting them if there is an issue. Differences in lending laws between the USA and the lender’s country may also cause problems. Because of this, many people choose to get their small loan from a US-based lender. There are two major types of small loans, secured and unsecured.
What’s the difference between a secured loan and an unsecured loan?
An unsecured loan is essentially made to the borrower on the promise that they will pay the lender back. Because of this, lenders use things like credit history or proof of income to determine not only how much a borrower can pay back, but the likelihood that they will default on the loan. In contrast, a secured loan is one in which the borrower pledges something of value to the lender against the loan. Meaning, the borrower promises to give the lender whatever they pledged if they default on the loan.
If a borrower defaults on their loan, that is, misses too many payments, the lender has the right to repossess whatever collateral was used to secure the loan. The exact procedure varies by state, and from lender to lender. In general, lenders will alert borrowers that they are missing payments. Some states require a notice to cure, which informs the borrower that they have a window of time to pay the balance of the loan. If the borrower fails to get current on their payments, the lender can repossess the collateral. Then the lender can auction the collateral to recover the balance due.
What are the advantages of a secured loan over an unsecured loan?
At first blush, it may appear that a secured loan is worse than an unsecured loan. After all, the borrower could lose their collateral and the lender might not make their money back auctioning the collateral. However, secured loans have a number of advantages over unsecured loans:
- More-lenient credit history requirements: Because the loan is secured with something the lender values that can be repossessed, they aren’t relying solely on the borrower’s word that they will repay the loan. As such, lenders don’t need to depend so heavily on things like credit score when deciding whether or not to offer a loan to a borrower. They can use the value of the collateral and the borrower’s income to determine how much they are willing to lend.
- Better loan terms: Because lenders can use the sale of the borrower’s collateral to recoup their money if the borrower defaults, it lowers their risk. Even in the event of a default, they should be able to recover at least some of what they are owed. This lowered risk may translate into better terms for borrowers. These better terms can take a variety of forms. For example, the lender may offer to provide them with more money than if they had nothing to secure the loan, or even a better interest rate.
How do I pick a small loan lender in the US?
The decision of which company to get your loan from can have a major impact on your experience. You’ll want to select a lender that’s been around for a while and has a good reputation. Companies with established reputations have more to lose if they mistreat their customers, and a lot to gain if they treat their customers well. One such lender is LoanMart. They are a direct lender providing car title loans that has been in business for over fifteen years.
What are the advantages of getting a small loan from LoanMart?
There are a number of advantages to using LoanMart as the source of your small loan:
- US-based customer service: LoanMart’s customer service center is easy to reach and their representatives are happy to answer any questions you may have about car title loans.
- Competitive loan terms1: LoanMart representatives work with their customers to try and craft loan terms that are not only competitive, but are customized to each borrower’s unique financial situation.
- Low repossession rate: Because LoanMart works with borrowers to try and find loan terms that are a good fit for their financial situation, they are less likely to need to repossess a borrower’s car for non-payment. And if a borrower’s financial situation changes, LoanMart will try to work with them to find a solution.
- Online process: Borrowers can apply for a LoanMart title loan entirely from home. They can fill out the application and submit their documents online. Then, rather than needing to bring their car in for an inspection, they just need to submit photos of the car.
How do I get a small loan from LoanMart?
Getting a car title loan from LoanMart can be simple. Take advantage of LoanMart’s streamlined application process by following the steps below and you could potentially receive your title loan of up to $30,0001 in as little as one business day3.
First, decide the most convenient way to contact LoanMart:
- Visit a participating store
- Call 1-877-787-4923
- Sign up online
Once you’ve decided how to get in touch, all you need to do to apply is:
- Fill out the registration form
- Submit your documents to your LoanMart representative
- Sign your LoanMart agreement1
Getting a small loan can be a stressful process. You can save yourself a lot of problems by choosing a U.S.-based lender. If you choose a company like LoanMart, they may be able to offer you a competitive loan1.