When it comes time to borrow money, there are many options and avenues available to those with good credit.
The typical route that high credit borrowers take is to go straight to the bank for a traditional fixed or variable-rate loan, while one of the lesser-used options is to take out a line of credit.
Businesses have been using lines of credit for years in order to satisfy their capital needs, but individuals rarely tap into lines of credit, often because they don’t realize it’s a possibility.
This post goes through the basics, explaining what a line of credit is, as well as how to take one out.
What is a Line of Credit?
A line of credit is basically a flexible loan from a bank to an individual or (more commonly) to a business.
A line of credit establishes some amount of money that the borrower can access as needed, which they will then repay immediately or over a specified period of time. Similar to loans, borrowing money with a line of credit leads to interest charges that start accumulating as soon as the money is borrowed.
A line of credit can be more advantageous than a traditional loan because you only have to pay interest on the money that you actually use, whereas with a traditional loan, you’re charged the full amount of interest on the entire loan from day one.
Taking out a line of credit also helps to improve your credit score, which will be used to determine how much you can get approved to borrow in the first place. The more you borrow and pay back on time, the higher your credit score will rise and the larger a line of credit you’ll be able to get approve dfor.
How to Get a Line of Credit
Obtaining a personal line of credit typically requires a good credit score and good credit history, especially because lenders burned by the financial crisis are less willing to extend this type of borrowing than they were in years past.
To maximize your chances of approval, it’s best to apply for a personal line of credit when your finances are healthy, rather than after you’re already in trouble.
A quick survey of banks and credit unions finds that personal lines of credit are available in a variety of amounts and interest rates. As one example, Wells Fargo offers personal lines of credit in amounts ranging from $5,000 to $100,000.
According to statistics, most personal lines of credit are typically provided for amounts below $10,000. And when someone wants to take out a line of $50,000 or more, a much more rigorous review process kicks in to ensure that the borrower is fully qualified. At that point, paperwork such as tax returns and documentation of personal assets becomes absolutely necessary to receive an approval.
A Wells Fargo survey of clients who took out personal lines of credit found that funds were typically used to consolidate debt, pay education or medical costs, or pay for used cars or home improvements, so the resources appear to get used in about the same way as traditional loans.
However, some consumers use lines of credit for smaller costs as well, like vehicle repairs, furniture, educational expenses and insurance costs.
Car Capital Financial
If you don’t get approved for a new line of credit, or if you can’t borrow enough money this way, then you may need to consider a vehicle title loan instead.
Title loans are a safe form of secured loan that uses the equity value of your car, boat, or other vehicle as collateral for a personal loan.
A title loan works by awarding you with cash based on the value of your vehicle. In exchange, the title loan company takes temporary ownership of your car’s title (pink slip).
Typically, you begin to make loan repayments about 30 days from the time you take out your loan, and once you’ve fully paid it off, your title will be returned.
Some title loans are better than others, as not all companies allow you to continue driving your car during the course of the loan.
If you need money now, and you’ve got a vehicle that is either totally paid off, or nearly paid off, then you’ve virtually guaranteed to qualify for a safe, reliable and affordable car title loan from Car Capital Financial. Title loans are issued based on the borrower’s ability to repay the loan.
If you’re a Southern California resident, we can get you the money you need in as little as 30 minutes from receiving your first call.
To get your title loan today, call us now at 1-888-500-9887!