Today, many people in Arizona are finding out that it is very difficult to borrow money from traditional lenders. In the past, consumers have been able to easily borrow from credit cards, home equity lines of credit, personal loans, and more. Because of the housing downturn in the entire country, banks have become a lot tighter with credit. In the past, people with bad credit could find lenders willing to take a risk. Today, there are hardly any sources of credit for those with no credit or bad credit. Thankfully, it’s still possible for some with bad credit to borrow from title loans AZ.
Phoenix title loans are based upon a borrower’s income as well as collateral in the form of a car’s title. The quality of the collateral depends on the cleanliness of the title as well as the value of the car. If the car does not meet the lender’s minimum value requirement, a loan will not be approved since it’s inappropriate as collateral. Borrowers should note that the lender will not let the consumer borrow more than a fraction of the value of a car. There are costs relating to the collateral such as depreciation and transaction costs. The borrower’s income is important since it forms a source of funds for repayment. The income needs to be something regular such as employment.
The important thing to note is that an AZ title loan does not depend on credit history. The lenders for auto title loans do pull credit history to make sure the borrower is not misrepresenting himself. Other than that, the credit history is not used. Many people have been approved for title loans with bankruptcies, judgements, late payments over 120 days, tax liens, and much more. This is why title loans are very attractive to those that have bad credit or no credit.
If a consumer has poor credit history but has a car with a clean title and regular income, he has a good chance of securing approval for a title loan. This is one of the few ways that a person with poor credit can borrow money today, especially given the current tight credit environment.
