The fact that someone can get instant money whenever necessary, even when in a hurry, seems like such a convenience. Pink slip car loans really come in handy in such cases, as you can get a loan very quickly. Let us begin with explaining, what are pink slip loans?
A pink slip basically is the official title of a vehicle, issued by the DMV (Department of Motor Vehicles), to the righteous owner of the vehicle, of course stating the fact that a said person owns the vehicle.
Now, getting back to where we initially started, what are pink slip loans, exactly? So, a pink slip loan is a quick method of getting a short-term loan in which you get an amount of money, in exchange of your vehicle’s title/pink slip.
How does a pink slip loan work?
After getting the right insight into the subject matter of pink slip loans, it is also essential for us to understand how do these very convenient loans actually work.
The loan basically is secured against your vehicle and hence the amount of the money that you are offered for the vehicle plainly depends on two factors:
- The value of the vehicle.
- How long has it been since you bought the vehicle?
One vehicle can get more loan against itself than the other but you still cannot expect it to be near the actual value of the vehicle.
The criteria for lending money really differ from one lender to the other, but generally, the money offered is somewhere near the trade-in value of your vehicle, approximately speaking, 25 to 50 percent of the vehicle’s actual value.
When the value of your vehicle is confirmed, the lender will decide the amount of money they are ready to lend you. Then come in the terms of the loan in the picture, which usually include:
- Amount of the loan.
- The amount of interest that will be paid on the loan.
- The amount of time in which one requires to pay the money back.
The interest on pink slip loans, just like the other short-term loans, is usually quite high.If, for some reason, you are not able to pay the loan back in accordance to the entire agreed upon terms, the legal ownership of your vehicle will be allocated to the lender by means of the pink slip.
