Medical emergencies hit the hardest when you least expect them. You would like to choose the best possible treatment, especially when a loved one is involved.
In such a situation, medical debt can rack up at a blinding pace and most medical care facilities do not offer much leeway in terms of settling the bills. There is generally little to no room to renegotiate the payment or reduce the amount you owe.
Insurance may cover certain aspects of the medical bills. However, if you find yourself up against a significant medical debt, then using a car title loan could be a good option.
Here are certain benefits of auto title loans that make them a viable option for raising money to pay medical bills.
What are Car Title Loans?
Auto title loans are a quick and easy way to acquire cash that are available in most US states if you have a clear and lien-free title to your car. You should have your name on the car title because the loan amount is valued against the worth of the car.
These loans are short-term and available to everyone regardless of credit scores or history. Car title loans involve the lender placing a lien on your car’s title for the duration of the loan, which is cleanly removed when the loan is paid off in full.
There are a number of benefits of taking up these loans for paying medical bills.
Car Title Loans Are Quick
If you need to settle medical bills or pay for a procedure up front, then you may not have time on your side. Hospitals and clinics are notorious for demanding at least 3/4th of the payment upfront.
Medical emergencies or even regular medical procedures require immediate payments. It is not possible for everyone to have an emergency fund to cover these bills.
Car title loans give you the benefit of instant cash when you need it the most. Lenders offering auto title loans are speedy in their application and approval process.
In fact, the only delay in getting these loans can be due to the time taken by a borrower to furnish the relevant documents.
Most auto title loans are approved within 30 minutes and the money disbursed almost instantaneously. You can have the cash in your account to cover all your medical bills the same day or by the next day.
The processing time differs among title loan lending companies. There are some lenders who guarantee same day cash. If you walk into their physical store, you may be able to drive away with the cash.
Unlike, traditional loans that take days and even weeks to process loan applications (only to reply with ‘loan denied’) car title loans are quick and immediate.
Significant Loan Amounts
Unlike payday loans that are for only a couple hundreds, car title loans can be for thousands of dollars. Depending upon your car’s value and the equity you hold in the vehicle, you can have a loan that can range anywhere from a few hundred to $25,000 and even $50,000.
However, car title loans are regulated by state governments and all licensed lenders follow these guidelines. You may not be able to borrow more than the maximum set limit. A car title loan amount can easily be used to cover your current medical bills and to pay for pharmacy expenses as well.
However, it is important that you take up a loan to pay for only necessary expenses. These loans are short term and even with a comfortable repayment plan, it may get difficult to pay a huge loan amount.
You can get a higher loan amount by convincing the lender of your repayment capabilities. High value cars can automatically raise the loan amount. Lenders use KBB or Kelley Blue Book to determine the value of a car.
Make sure you fix minor scratches and clean the car before the physical inspection. A loan assessor may also factor in the mileage of your automobile.
Loan amounts are negotiable since a lender is not ruled by government guidelines. In fact, it is possible to get different quotes from multiple lenders. Make sure you shop around for the best lenders and loan terms.
Medical debt can be stressful and frustrating. Bills can quickly pile up whether you are paying for a loved one’s procedures, medical emergency, or a cosmetic procedure. In such a situation, applying to various traditional lenders like banks and credit unions for quotations can be cumbersome.
You may not even be able to collect all required documents as needed by these financial institutions. Car title loans are simple to apply and require minimal documents. Most lenders make sure that their application process is easy and can be completed within minutes.
This makes it easy to seek multiple quotations rapidly. Almost every lending company has an online presence which makes the whole process even more convenient.
You will need to provide government issued photo ID proof, proof of residence, Social Security Number (or taxpayer’s information), and proof of income, apart from the car title in original.
Car titles are typically misplaced or lost since they are rarely used. Many lenders understand this and will help you file for a duplicate. You do not have to worry about anything.
Some states make it mandatory for lenders to identify a borrower’s loan repayment capabilities. To this effect you may have to provide proof of income in the form of bank statements, W-2s, and pay stubs.
You don’t have to be working or have gainful employment to be eligible for a car title loan. Disability checks, retirement benefits, Social Security checks, and child support or alimony payments are also considered viable sources of income.
Minimal paperwork makes sure that you face least issues when applying for a car title loan to pay for your medical bills.
Retain Use of Car
Even though car title loans are secured loans with your car as the collateral, you do not lose out on using your car as normal. One of the major benefits of taking out this loan is that you get to keep driving your car while enjoying the loan amount.
It is unimaginable to lose rights to your car when you are in the middle of paying for your healthcare bills. Car title lenders understand that you may depend upon your vehicle to commute to work and for other necessary chores.
Hence, almost all reputable lenders never insist on impounding the vehicle, even when the loan period is active. This is a significant difference between car title loans and car title pawns.
In fact, if you use your car as the collateral for taking up a conventional loan, the lender may ask you to park the vehicle at a warehouse or a garage for the duration of the loan.
In car title loans you do not lose driving privileges even if you are behind on paying the loan instalments. A lending company would work with you and draw up repayment plans rather than threaten you with repossession.
Contrary to popular belief, lenders are not after auctioning your vehicle, since most times they are unable to recover the loan damages.
Repossession also makes it difficult for borrowers to repay the loan amount balance. Hence, lenders typically, work with borrowers and create repayment plans that can be comfortably adhered to.
No Credit Check
Car title loans are available to everyone regardless of their credit history. These loans are secured and the lender is comfortable in the collateral security your vehicle’s value provides. You can acquire a car title loan even with a credit score as low as 450.
However, you may have to pay a higher interest rate with a bad credit score, since the lender may identify you as a high-risk borrower. Most traditional financial institutions do not offer loans on credit scores under 600. The same holds true for credit cards.
This can be a major problem when you are in a medical emergency or have piling medical debt.
No Questions Asked Loans
One of the major benefits of car title loans over other loans is that these are no-questions asked loans. You do not have to explain or discuss your private life with a loan assessor.
You can simply apply online or drive into the many physical lending stores and get a loan. If you are among the people who like keeping their business private, particularly medical history, then this loan option is for you.
Traditional lenders are careful about lending and ask multiple questions about the loan purpose or loan utilization. It can be awkward explaining your situation, especially if your medical procedure is somewhat personal.
You can use the money left after paying off the medical bills as you like. You do not have to necessarily use it to pay for other healthcare expenses which are coming down in 2018 and going forward because of less regulations but this is another topic. Car title loans can be used to pay for vacations and even have repairs done to your house or car.
Medical bills can be very stressful especially if you have a bad credit score. Car title loans can be very useful since they are quick, for high loan amounts, and available to people with bad credit history.
However, like all other loans, you need to be careful and take necessary steps to repay the loan when it comes due.