Banks Take Time to Sanction Loan but Car Title Loan Does Not

When you need to borrow money, there are a few alternatives available. In case of small borrowing one could turn to family and friends, but many a times they also struggle to help you with your financial obligations. Most of the people only have idea about the traditional loans which includes banks and credit unions but there also exist other types of loans which are far better and faster than traditional loan types. Car title loan is considered as a savior for people with bad-credit score or in urgent need of cash. Most of the people either have no idea about the car title loan or they cannot differentiate between the traditional and title loan. Here is some detailed information about the two which can help explain the difference between both.

A traditional bank loan can be acquired by going to a financial institution – bank or credit union. The borrower needs to fill out an application and then provide all of the requested documentation that is needed to process the loan. In case of traditional bank loan the lender investigate the borrower on the basis of personal and financial information provided in the application. The lender learns about the employment history, credit score and other background information of the borrower. The lending institution then begins a lengthy process of examining the credit worthiness of the borrower. The examination and verification can take days or even weeks. On the basis of credit score and the borrower’s ability to repay the loan, the lender makes the decision as to whether to sanction the loan or not. The complete process of traditional bank loan can take days or even weeks and the approval ratio is really low.

On the other hand the car title loan type is little different from the traditional one. The potential borrower can fill the loan application form online or offline to start the process. The car title loan doesn’t determine the financial condition of the borrower and therefore, they don’t check the credit score. The borrower is asked to verify their identity and residential address by providing a government approved identity proof, in addition to the title of the vehicle. The vehicle title or the pink slip states the ownership of the vehicle, which borrower needs to temporarily provide the lender in exchange of the money. The lender inspects the vehicle condition and its market value to determine the amount of the loan. After determining the loan amount an offer is proposed to the borrower which contains the detail about the loan amount, time period and interest rate. If the borrower agrees on the provided offer a lien is placed on the vehicle title and money is instantly provided to the borrower. The car title loan process can be completed within two to four hours, from start to end.

Being a secured loan, the Car Loans of America doesn’t inspect the financial background of the borrower making it easier to process the loan with minimum paper requirement and better interest rate.