Are you going through a financial crunch? Or did the unexpected expenses really ruin your monthly budget? If either of these is true, an auto pawn loan might be a great option.
Whether you need cash for unexpected expenses or extra dollars to repair your existing debt, an auto pawn loan is one of the best options to help you get your hands and quick money. And the best thing: You don’t need to have an outstanding credit score or remarkable financial history to qualify for one.
In fact, auto loans provided by pawn shops are way less complicated than the lending options available at traditional banks.
Want to get started? Here’s what you need to know about car pawn loans.
What Is An Auto Pawn Loan?
Contrary to the popular belief, auto pawn loans are a lot different than car title loans. Unlike a car title loan, where you transfer the title of your car to the pawn shop owner, an auto pawn loan is where you submit your car to the pawn shop. The pawn shop then stores the vehicle in a safe place until the loan term ends.
To be precise, an auto pawn loan is a short-term loan where you put your car, SUV or other qualifying vehicles as collateral with the pawn shop owner and borrow cash based on the fair market value of your ride. If you make sure to pay the timely payments, including interest rates, the pawn shop will return your vehicle once the debt is clear. However, in case you default. The pawn shop would have to sell off the vehicle to make up for their losses.
How Does It Work?
Factually, pawn shops accept all types of vehicles, given they are in working condition and have an attractive exterior. And, because the loan amount depends upon the fair market value of your used car, you can either get it inspected through the valuation meter or ask the shop directly to offer you the quote.
The inspection might take several minutes. Once inspected, the salesperson will offer you the dollar amount. If you are okay with the quote, you would be required to submit some documents like residence proof, income proof, lien-free vehicle title and your car. After you submit the car and supporting documentation, you will get the money immediately. The loan comes with no waiting period or transfer delays, allowing you to get instant money within a few minutes of submitting your car.
Tips For Pawning Your Ride
Regardless of the seemingly easy procedure, there are a few things you must know about a car pawn loan. Moreover, if you want the best cash value and ensure a streamlined application procedure, refer to the following tips.
Understand The Process
As stated above, there’s much to learn about car pawn loans. There might be cases when a pawn shop may have a minimum vehicle value required to qualify for the loan. So, to make things easy for you, you must understand the process. This would involve online research about a car pawn loan and what you need to qualify.
Be Ready With Proper Documentation
Auto pawn loans may be easy, but you need documents to qualify. For starters, you must have proof of income, proof of residency, valid ID issued by the government, a driver’s license, proof of insurance coverage and, of course, your car. You must also carry other vehicle documents like car registration. Lastly, to ensure that you are the rightful owner of the car, you must also bring a lien-free title document.
Eligibility Criteria For The Loan
Technically, there are no such eligibility criteria required to qualify for the loan. However, you must be above 18 and have proper proof of residency and income to move forward. And, if you don’t have a job, you can show other unemployment income like disability compensations or retirement income.
Summing Up
To get the best quote, you must ensure that the car is in proper working condition. So, to get started, you must remove bumper stickers and add-on devices, fix headlights if broken, get the tires serviced and clean the batteries. Lastly, pay the loan on time to avoid being a defaulter.
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