No one can make a budget for their entire life and follow it as uncertainties can happen at any time. Predicting accurate cash requirements for the future is not possible and there are situations when you may need money immediately to resolve them. Such situations may make you feel stressed but one needs to stay calm and think positively. Many new loan opportunities are on the horizon such as car title loan and by using them you can avoid all problems that come with bad credit. There are several lenders that help customers with bad credit by providing them with the necessary funds.
Many Canadians with no credit or poor credit score often face difficulties in obtaining approval for a loan. Most people think that getting a loan from major banks and traditional lenders is a safe and best option. This is because they are not familiar with the other financing options available in the market.
No doubt getting a loan from these sources is a good option as the interest rates are quite low. But these sources only approve loan applications of those who are able to meet their strict requirements. They need a good or excellent credit score, and also take a longer time to approve your loan applications.
Here’s the detailed process for getting a bad credit car loan.
Whether you are looking for a loan, purchasing a new car, or applying for a mortgage, the approval for all these things will depend on your credit score. This does not mean that people with bad credit scores do not have any options. They can also get financial help from alternative lenders such as Apex Loans Canada.
Why Do People With Poor Credit Scores Struggle To Get A Loan Approval?
There are two main reasons due to which people with poor financial history struggle in getting approved for a loan.
- Credit Score
In Canada, the credit scores range lies between 300 to 900 points. A good or excellent score can help you get loan approval from any institution in Canada. But a credit score which lies below 660 makes it challenging to get approval for a loan from various institutions.
Each lending institution has its own terms and conditions and the average credit score that they account for providing approval. This can make it difficult and frustrating to find a suitable lending institution that best suits your needs.
It is next to impossible to improve your credit score within a few months. People find it difficult to search for and select a particular way to improve their credit when they already have a poor financial history.
One of the best and suitable ways is to make regular payments of a loan which can help you in the future. To fulfill your quick financial needs and improve your credit history, you should apply for a title loan. This loan is open to everyone and anyone can apply for it.
- Income
Many lending institutions consider other factors including income source, occupation, repayment history, etc. But there are some institutions that do not consider this factor and provide loans to people with less income or no income. This indicates that there are opportunities available in the market if one searches for and wants to get the benefit from them.
Things One Should Consider Before Applying For A Title Loan
Here are some tips that you can follow to get approval for a loan easily even if you lag behind these two points mentioned above.
You can apply online for the loan and if you pre-qualify, you will also get approved in less than 3 hours, provided that you fulfill all their needs. Let’s take a look at the collateral loan requirements of lending institutions.
- A borrower who owns a fully-paid vehicle which is a 2010 or newer model can easily apply. You should have a lien-free title of the vehicle.
- A valid Canadian driving license.
- You need to submit proof of your legal age as per your respected area.
- Also, submit proof of your permanent address.
- You need to provide an extra set of keys that work on all parts of the vehicle.
- Most importantly, you must provide the vehicle’s registration and insurance papers in your name.
These are the minimum requirements that you need to submit and with this, you can proceed to the next step of the loan approval. Now you have to take your vehicle to the lending institution for its inspection. The professionals inspect your vehicle based on various factors such as the working condition and current market value. This will determine the equity value in your vehicle and this will be the maximum amount that borrower can take from a lending institution.
Perks Of Vehicle Title Loan
- A simple and easy way to get quick cash:
One can obtain approval for this loan within a few minutes that makes it the fastest and convenient way to get quick cash. Thus, most people prefer this loan in financial emergencies as this helps people get money quickly. - Keep driving your car:
With a car equity loan, you need not give your vehicle to the lending institution for storage. As long as you make payments within a defined timeline, you have the freedom to continue driving your vehicle even during the loan term. - Flexible payment plans:
If in any case, you feel that you are not able to pay your loan on time, make sure you contact your lending institution and let them make some arrangements. Many lenders provide flexible payment plans which suit all types of budgets. - No prepayment penalties:
If you want to close your loan account before the due date of your loan term, you can do so without any problem. Many institutions do not charge early payment penalties and let their customers feel relaxed. You can pay the loan amount in a couple of installments or in small monthly payments as per your preferences. - Competitive interest rates:
Many lending institutions such as Apex Loans Canada offer title loans with genuine and competitive interest rates. You can compare the rates among several lending sources and choose the one that best suits your needs.
How Can A Car Title Loan Help You Improve Your Credit Score?
If you are not aware of your credit score and have no ideas where your finances stand, you should get it checked. It is always better to do some homework before applying for any kind of loan. If you find that your credit score is low and you are in need of money at the same time, a car title loan can help you both ways.
With this loan, you will be able to get money in minutes and you can easily resolve any problems that you’re going through. At the same time, it will help you improve your credit score and you will be able to see it in one month.
Thinking how? Well, once you start making payments on time every month, the score will automatically start improving. This is because the payment history of your account will contribute 35% to the credit score.
Borrower’s good financial history tells the lender that you are responsible and will pay their loan amount back on time. With a good credit score, you will be able to enjoy better financial products with lower interest rates.
Therefore, a car title loan is an optimized loan option for bad credit borrowers and helps them in their bad times. So, stop waiting and take a step forward to eliminate your financial troubles and make your life better.