PINK SLIP LOAN
A pink slip loan is a type of loan that is obtained by using your car, truck, motorcycle or any other vehicle as collateral. The borrower hands over his car title to the title lender and in return receives cash. You must pay back your loan as scheduled so you can get your car papers back once your payment is complete. Any default in repayment leads to the lender repossessing your car. Opting to use your car title as a collateral for a loan is one of the better options for subprime borrowers who need urgent cash, as long as you can certify you are the owner of the pink slip. People with bad credit history find it very easy to get a pink slip loan because they can secure it with just their title loan. All the borrower needs to get his loan approved are a clear title of a car that is paid or nearly paid off to qualify. Pink slip loans may be the only way to obtain emergency cash for people with poor credit rating. Pink slip loans are short term loans are basically given for a period of 12- 24months with a process that is very simple and fast. Unlike traditional loans with bank, there are no need for unending filling of forms and formalities.
Lending companies have a loan officer who is the person that helps you at the title loan office. He has been trained by the company to specifically handle your type of loan. Do not be afraid to ask him any question and don’t put your signature on the dotted line until you have a full understanding of the whole process including when you are to make your payment and how much you are to pay. The amount of money you can borrow against your car is based on the value of your car or the equity that you have on the vehicle. The greater your car value, the more you can borrow, don’t expect to squeeze the car’s full value from a title loan. Lenders want to make it easy for themselves to get their money back, so they will lend out only what they can get quickly from your car if they have to repossess and sell your car. They often install a GPS tracking device on your car in case the borrower tries to hide instead of paying off his loan.
The pink slip loan often attracts a high interest rate whereby lenders often charge an average of 25 percent per month to finance the loan. That translate to an APR of at least 300 percent.it could be higher depending on the additional fees that the lender may require. Also, in a situation where the borrower cannot make payment at the stipulated time, he should however request an extension in the date to make the complete payment. This would bring additional cost because the loan has been rolled over to another month. The individual may end up paying more interest than expected.