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Years ago, when a consumer needed a loan for an emergency, they’d turn to their local bank or credit union. The consumer often knew the loan officer at the bank on a first name basis through social events or their children’s school. Visiting their friend at the bank for a loan was a normal event.
But over time, banks became larger and less personal institutions. And even credit unions have taken on that sterile, corporate feel. As banks stopped being about personal relationships and more about the bottom dollar, applying for a loan at a bank became a more difficult and unpleasant process. Bank staff revolve quickly, leaving you with new employees to deal with regularly. And if your credit and financials aren’t impeccable, chances are you’ll be rejected for a bank loan, even after weeks of paperwork.
When banks turned their backs on a large part of the population, many people were left without good, reputable loan options they could rely on when they needed money. Luckily alternative lenders, who once may have faced the same financial hardship and struggles finding a loan, designed new and creative loan products to meet the needs of those no longer served by banks.
The media loves to criticize many of these loan products like payday loans, car registration loans and advances, but what would they do if they had few options for borrowing the cash they need when everyone else they asked or applied with said no?
As lenders specializing in pink slip loans, we often forget that some of our visitors are first time borrowers. We assume that they know our lending lingo and what pink slip loans are. But it often isn’t the case. That’s why we’ve put together this article that answers the question of what is a pink slip loan. We’ll share the basics of pink slip loans and how pink slip loans work. Knowledge is power and brings peace of mind. Know what you’re getting yourself into before you sign a loan contract.
Pink slip loans are also known as car title loans. Pink slip loans are designed for people who own their car, free and clear. Free and clear means that there is no debt or money owed on the car and no liens or lien holders listed on the pink slip. The car must be in the borrower’s name and the borrower must have their pink slip, or title in hand. The pink slip will serve as collateral for the loan. A borrower will leave the pink slip with the lender until they pay the loan back. In exchange for leaving the pink slip as collateral, they get the cash loan they need quickly and still get to keep driving their car while they pay their pink slip loan off.
When you apply for pink slip loans, the entire process is quick and easy. The short application, once submitted will follow with a loan approval quickly. The loan approval will list the amount you can borrow and what documents you must submit to be verified before you get the cash.
A credit history check will not be run with pink slip loans. The reason being that the lender is lending you the money you need based on your car, not on your credit history.
The lender will decide how much they are willing to lend you based on two factors. How much your car is worth and how much they think you can afford to pay back. Pink slip loans experts are professionals and knowledgeable enough to accurately decide on a good number using these two factors. Their goal is that you succeed in not only borrowing the money you need, but in also paying the loan back in a timely manner.
Pink slip loans companies decide on your car’s value using industry standard market values. Once you provide them with your car’s details through the application, they can visit Kelley Blue Book or Edmunds’ websites car appraisal tool to quickly find your car’s make and model market value.
The lender will lend you a percentage of this amount. The more confident they are that you can pay the loan back, the closer to the full amount of the car’s value they are willing to lend you.
A lender will figure out how much they think you can afford to pay by reviewing your income. They will want to see recent bank statements or pay stubs to calculate how much money you bring in each month and how much you can afford to pay back.
When you’re approved for pink slip loans, you will get a breakdown from the lender of the interest, fees and principal that you can expect with the pink slip loan. Pink slip loans will be spread out longer than a payday loan or registration loan. Those two loan alternatives must often be paid back by the next paycheck. With pink slip loans, a lender is more willing to create a customized, flexible loan repayment schedule that is convenient for you.
After approval, you speak with a loan officer who will review your income, budget, needs and shortfalls to come up with a payback time that works best for you. Once they customize your loan package and repayment plan that you can both be happy with, a loan agreement is drafted for you to sign.
It’s important to remember that although a lender is willing to lend you more than you need and let you pay it back over a longer period of time, the bigger the loan amount and the longer your take to pay it, the more it will cost you in interest rate fees. Be realistic about what you can afford and stick to the minimum you need.
Have any other questions about pink slip loans? We are here 24/7 to help! Call or email us. Or fill out our free, no obligation pink slip loans online application to get a loan estimate now.