What Are Auto Pawn Loans?
Auto pawn loans are very similar to traditional pawn loans, except that they involve pawning your car, or other vehicle. Pawning your car involves temporarily swapping possession of your vehicle to use it as collateral for a short term installment loan. When you pawn your car, you may or may not be able to keep driving it, depending on the terms worked out with the car pawn shop.
In many cases, you don’t get to drive your car or use it once it’s been pawned, which is probably the biggest downside to title pawning. Typically, your vehicle must remain in the pawn warehouse or facility until you are able to completely pay off the loan, plus interest and any other charges that you might have accumulated (like late fees).
Virtually all car pawn loans will require that you make all of your loan repayments within a set time frame, which varies from shop to shop, but is typically between 30 and 90 days. If you aren’t able to pay back the loan in time, the auto pawn shop has the right to take permanent possession of your vehicle, which means that you’ll probably never see it again.
An auto pawn loan is thus only a good idea if you’re fairly certain that you’ll be able to make the loan repayments on time, and in full, before the deadline hits. While some auto pawn shops will offer extensions on their loans (usually with added fees and penalties), others may not be willing to negotiate at all. Be careful who you contract with!
How Can I Pawn My Car?
It’s not that hard to do an auto pawn, since there are lots of car pawn shops around the country, and especially here in Southern California. Whether you’re in San Diego, Orange County, Los Angeles or Riverside County, it’s highly likely that you can get an auto title pawn loan within just a few miles of your own house.
If you don’t know where to find an auto pawn shop, you can always use Google to search for terms like “auto pawn san diego” or “auto pawn los angeles”, but you could also go to a regular pawn shop and ask them if they do auto pawning. Many times, even though it isn’t advertised, traditional pawn shops will be able to help, or at least to point you in the direction of someone else who can.
The Auto Pawn Process
To get your loan, you’ll have to bring your car in for an evaluation, where one of the lender’s employees will evaluate your car’s value, then offer you a secured personal loan up to it’s total value. You may be able to negotiate on this offer, so don’t be afraid to ask for more than they initially tell you they can provide.
Once you’ve agreed to loan terms, it will be time to fill out the corresponding paperwork and finalize your arrangement with an official auto pawn contract. For this part of the process, you will almost always need a valid driver’s ID, proof of insurance and at least a second ID on hand, so be sure to arrive with these things or you’ll more than likely be forced to leave empty handed.
After everything is signed off, you will probably have to hand over your car to receive the loan, but depending on who you work with, they might let you retain possession of the vehicle throughout the course of the loan. Find out whether or not you’ll get to keep your car in advance, since you’ll need to arrange for a ride home if you can’t.
Why Do People Pawn Their Cars?
People get these types of loans for different reasons, but often because they’re facing a serious budget shortfall and have no other means for generating cash. Auto pawn loans are often used to pay for bills, make rent, or cover over immediate financial needs, and are hardly ever used for things like taking vacations, buying new stereo equipment or other luxury goods.
Many times people will pawn their car to get money they can use to pay for emergency costs, allowing them to avoid potential financial ruin, stop a bankruptcy or foreclosure, or even avoid having their car repossessed.
Auto Pawn Loans vs. Auto Title Loans
It’s easy to confuse auto pawn loans and auto title loans, as they don’t just sound alike, but are also quite similar. Both are technically collateral loans, since each requires you to use your car as insurance for the lender, and both are also often used as loans for people with bad credit, since neither type of loan typically require a credit check.
The biggest (and most important) difference between auto pawn loans and auto title loans is that getting an auto title loan is more likely to allow you to retain use of your vehicle while you’re making repayments on the loan. That’s a huge, and extremely important difference, and while it may cost you a little more in terms of the interest rate you’ll be forced to pay on the loan, it could also make the difference in your ability to get to work. Another difference is that title loans are issued based on your ability to repay the loan.
Losing access to your car (even if only for a short period) can have a massive negative impact on your lifestyle and especially on your income. If you depend on your car to get to and from work, meet clients, or for any other business-related activities, then not having a car at a time that you need to raise money to pay back your loan is not a good idea.
Although these two types of loans may appear to be extremely similar, the big difference is that a car title loan allows you to have much more freedom, while pawning your car is likely to prevent you from being able to drive it.
Car Capital Financial
If you’re facing a financial problem and are in need of fast and reliable funding, then contact Car Capital Financial today. We’ve provided effective car title loans to Southern California residents for over 15 years, and we specialize in helping people get back on their financial feet. To get the money you need in as little as 30 minutes, please call us now at 1-888-500-9887.