If you have been turned down by banks for a traditional loan then you are probably looking at alternative ways to obtain financing for your needs. There are many ways to do this, and one way that is becoming increasingly popular would be to make use of a car title loan. Basically, you will be able to get a loan at a higher interest rate in exchange for the title to your vehicle. Many people such as yourself are aware that acquiring more debt can often temporarily lower your credit score. However, with a car title loan you will be able to secure the loan without it having any effect on your credit rating. Why is this so? There are a number of reasons why, including the following:

1. A car title loan is a secured loan.

While its important to read the fine print when signing up for this type of loan, the fact that it is a secured loan means that credit isn’t needed. In other words, the loan is utilizing the value of your vehicle instead of your credit. Because of this, your rating will not be affected.

2. There is no credit check whatsoever.

Another advantage to a car title loan is that there is no credit check whatsoever. At times a credit score can be adversely affected because of too many inquiries. Because of the fact that this type of loan is based off of the title to a vehicle you possess, there is no need for any type of credit inquiry. This can be beneficial to you because your credit will not be further damaged because of too many inquiries. If you are careful, this is one way to get a loan if you have a poor credit history.

3. A car title loan has a higher interest rate and shorter terms.

As with anything else in life, there is a catch to the advantages of this type of loan. First of all, this type will often have much shorter terms than a regular loan. This type of financing will usually only have about a month for you to pay off the note, and often the interest will be in the triple digits. However, these loans are a great option if you use them wisely. They can help you with an unexpected expense. As long as you use this type of loan wisely you will get a great benefit from them.

Conclusion

The key to this type of loan is to make sure that you use it wisely. There are a lot of advantages to this type of loan, but if you fail to make the payments it can result in a vehicle repossession. However, as long as you make sure that you pay the loan back in a timely fashion this can be a good option for you.