If we want to borrow a large amount of money, the loan company in California can offer us a secured loan. Generally, you can mortgage a property or a car. But both options raise a lot of questions like: Can I drive the car if it is a collateral? Who should pay the insurance in such a situation? Before signing the contract, it is worth finding out what you really agree to.
Sometimes ta title loan is due to coercion because the borrower’s creditworthiness is too low for him to receive the preferred amount on the income certificate itself. However, many people consciously choose a secured loan, because then better conditions can be expected. Which does not mean that the loan is perfect, because it also has disadvantages.
One of the disadvantages of title loans in California on Maggieloans.com is the cost of fuel. Naturally, in order to use the car, you need to fill it up regularly. California has been a leader as the state with the most expensive fuel in the United States for a long time now. This year the situation has become aggravated by the fact that since last year fuel has risen in price by 1.5 dollars. That is why many people are starting to give preference to bicycles, which is the most useful and cheapest way to get around. On the chart you can see the difference between the average fuel price in the USA and in California.
The main advantages of title loans include even several times cheaper interest rates, because you cannot take loans or credits above the value of the collateral, and you cannot take many loans at once, which will prevent falling into a debt loop. In addition, you can borrow significant amounts of money – from several hundred to even several hundred thousand dollars, which is estimated based on the value of a given property. Thanks to this security, you simply have a higher creditworthiness. There are also cases when other debts that have not been settled before are repaid with a secured loan and thus exit the credit loop.
In the case of loans against collateral, creditworthiness is estimated based on the assets held. However, we can roughly say that we will most often get a loan of 50%-70% of the value of the pledged car.
What does the car loan in California look like?
The way to secure a loan is to transfer the title when the lender becomes the owner of the property for the duration of the loan agreement. But the claim for the return of the title to the person pledging the car after returning the entire loan to the lender is also included in contract. This way, when the borrower does not pay back the loan, he will simply lose the car and the loan company will be able to sell it because it is its owner. A transfer agreement is drawn up, and the loan company becomes the owner of the vehicle in 51%, i.e. it simply has the majority. It must also be stipulated in the contract that when the entire loan amount is repaid, the property is transferred to the borrower. With the completed documents and a signed transfer agreement, you need to go to the relevant department of communication and submit an application for entering the lender as a co-owner of the car in the documents, including the car registration certificate. This must be done within 7 days of the loan agreement being drawn up. After that, you need to send a scan or photocopy of the registration certificate to the lender with the company’s data. In order to get a loan, you also need to:
– be 18 and older;
- be a resident of the US;
- have a valid e-mail, bank account and phone number;
- be the only owner of the vehicle.
After the loan is repaid, you will receive a written declaration of release from the security. Once again, you have to go to your communication department and make changes to the registration certificate only in your name.
Since the loan company is still entered as a co-owner during the loan agreement, you can use the car freely, but you cannot sell it. It is worth knowing that in order to get a car loan, the car must have valid technical tests and civil liability insurance purchased.
What to watch out for when signing a contract?
When it comes to loans for high amounts with long repayment terms, you always first need to consider whether you really need such a loan and whether we will be able to pay it back. Because if we fail to do so, we will then lose our property, potentially the car. Another issue is the sum of all loan costs, not only interest on the borrowed amount, but it is also worth checking commissions, notary fees or replacement of the car registration certificate, as well as whether it is possible to extend the installment repayment date and how much it costs, if it does.
It is also not worth signing a contract with a random company. You always have to check who the lender is and whether the company really exists and whether it is able to pay out the loan amount that it offers us. It is also good to find out whether in the event of an unforeseen situation such as loss of job and temporary inability to repay the loan, you can negotiate conditions such as lowering the installment at the expense of longer loan repayment.
Resource: Maggie Loans