Subprime Loans
A subprime loan is normally sought by individuals with relatively little credit history or persons with less than satisfactory credit.
One example of this type of loan is the car title loan (sometimes referred to as a pink slip loan). In California, for example, the car title loan allows borrowers to use the equity in their car as collateral.
In order to apply for this loan, you need to demonstrate proof of ownership. The title to your car is the proof required. In California, you may also find that some lenders will require proof of income and will run a credit check as well. However, a fair majority of title loan companies will not check your credit.
The amount of your loan is based on the wholesale value of your car. And that amount is usually calculated as a percentage of the wholesale price of the car. The standard percentage is normally between twenty-five and fifty percent. The reason you are only offered a percentage is so that there is a cushion for the lender in the event the car had to be repossessed and sold.
Check The Value
However, that said, you still may wish to make an assessment yourself as to the car’s value before you approach a car title loan company in California. In order to establish value, consult The Kelly Blue Book (KBB) value found online. This resource has a database that lets you find your make, model and year. And there is also an option to add in any additional factors that could influence the value of your car. In most cases, the lenders will also be using this same resource to set a value for the loan..
The amount you can receive from a car title loan in Los Angeles will be very similar, if not the same, as the amount you would receive in San Diego, San Francisco, or any other area in California. This wholesale amount is often the same as you would receive in a trade-in. Once the wholesale or trade-in value is determined, then the tile loan company will decide how much of this value they will lend you..
As mentioned, in most cases the loan amount will vary between 25% to 50% of the value of the vehicle. The terms of car title loans and the laws governing how they are applied vary from state to state. You should also be aware the interest rate charged on the loan will vary from lender to lender. Make certain in this regard to find a lender who offers flexible payment options and interest rates that are competitive. If you live in San Diego, it might pay to see what the car title lenders lenders are charging in places like Chula Vista or National City.
So, if you have a poor credit history, a car title loan in California might be worth considering. It is a good short term solution in a cash crunch.
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Tags: auto title loan in California, California Title Loans, car title loan in Los Angeles, car title loan in San Diego, pink slip loan California