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Title Loans vs Title Pawns in Alabama

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Title Loans vs Title Pawns in Alabama

You need cash fast, but a bank loan is out of the question. You’ve heard about vehicle title loans but aren’t sure what they’re about, and think they have something to do with the pawn industry. Is that true? Well, yes and no, with one major distinction.

Here’s what you should know about title loans versus title pawns in Alabama.

What are Vehicle Title Loans?

These short-term loans usually come due in 30 days or less, although longer terms are sometimes available.

You’ll need a vehicle in your name and its title, the latter of which you relinquish to the lender until the debt is repaid.

If you don’t make timely payments, though, your vehicle could be seized and sold.

How Much Can I Get?

That’s determined by factors such as the state in which the title loan company is located, and the borrower’s income.

It’s also determined by your vehicle’s value, which is based on its age, make, model, mileage, and overall condition.

The vehicle’s style and trim can factor in, too. In Alabama, by the way, “vehicle” means any type of car or truck, including vans and hatchbacks.

Generally, you can expect an offer of between 25%-50% of the vehicle’s value. Overall, loans tend to range between $100 and $10,000 or more, with $1,000 being about average.

Note that title lenders generally want to see a lien-free title. But in Alabama, you may be able to get a loan even if your vehicle is not fully paid for, although approval is less likely.

The amount for which you qualify would probably be lower than it would otherwise.

What are the Requirements?

In addition to a vehicle in your name and title, plus a government-issued photo ID and a utility bill or so to prove residence, you’ll need to show you have the income to repay the loan.

For title loans in Alabama, that means submitting bank statements or pay stubs, and even tax returns. A Worker’s Compensation letter, Social Security or disability statements are acceptable too.

Instead of taking your vehicle in for an inspection, all you must do is supply good photos of your vehicle from all four angles. Remember to take shots of the odometer reading and vehicle identification number as well.

How Fast in the Lending Process?

The expediency of the title loan process is an industry highlight. In fact, it’s even faster in Alabama. After applying totally online, not only will you likely hear back that day, it’s also even possible for you to get funds the same day you apply. At the latest, you can count on getting your cash the day following approval.

Funds will be available via electronic deposit, an overnight check, or from a nearby MoneyGram location.

What is the Difference Between Title Loans and Title Pawns?

Ever since 1993, title loan lenders have fallen under the Alabama Pawnshop Act, which defined such lenders as pawnbrokers.

This means title loan companies must abide by provisions set forth in the legislation; the legislation delineates the duties and responsibilities of title loan lenders and borrowers.

For example, title loan borrowers must affirm the vehicle they’re using as collateral isn’t stolen. For their part, lenders must clearly detail the borrower’s obligations, including interest and associated fees.

The chief difference, though, between title loans and title pawns is pawnshops require possession of your vehicle – you must leave it with them.

This can be a huge inconvenience and may even hamper your ability to get to work to earn money to pay off the loan.

With title loans, you can use your vehicle as you would normally while you’re making payments. The title loan company will hold onto your vehicle’s title until the loan is repaid.

So, that’s the skinny on title loans versus title pawns in Alabama. Title loans can be a great way to get cash in a pinch. Just be sure you have the wherewithal for loan repayment.

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