Credit History, Credit Score and Your Kansas City Car Title Loan

Learn how your credit history and credit score affect your ability to get a Kansas City car title loan.

One of the most common misconceptions about Kansas City car title loans is that they are difficult for consumers with bad credit. Unlike loans from a traditional lender, title loans are based on the equity in the borrower’s vehicle. This means consumers can qualify for a title loan regardless of credit score and credit history. In fact, most title lenders do not run an applicant’s credit at all.

This doesn’t mean consumers should assume their credit score is unimportant — quite the opposite. Lenders use credit scores to determine whether someone qualifies for a loan and what interest rate they will receive. Consumers with a low credit score or no credit history are usually stuck with higher interest rates and limited options.

Waldo Financial, a Kansas City car title loan provider, encourages consumers to understand how they can improve their credit score to better qualify for loans and get the lowest interest rate possible. The following are important tips for consumers considering any type of loan, including a title loan.

Co-Signing on Loans Comes with Consequences
There are many factors that go into a consumer’s credit score, including payment history, total debt amount, length of credit history, credit inquiries, and types of credit. This means that having a diverse credit history with different types of credit (such as car loans, student loans, and a mortgage) shows a consumer is capable of managing many types of loans.

Some consumers make the mistake of co-signing on loans for other people to diversify their credit mix and improve their credit score. While this may work, it can also backfire if the other person defaults on their loan. In this case, the co-signers credit report with be hit with late payments and their score will go down.

Personal Information is Irrelevant
Many consumers erroneously assume that their personal information, such as their age or gender, is a factor in their credit score. The truth is that these personal details are not taken into account at all. Instead, factors like age of credit history, types of credit, whether there are missed payments or derogatory information, or high credit card balances are taken into consideration.

It’s Possible to Improve a Credit Score
Finally, Waldo Financial encourages consumers to take action to improve their credit score in any way possible as a better credit score translates into easier loan qualification and better rates. There are many ways to improve a credit score, including paying off credit card balances, making payments on time, not using all available credit, and avoiding applying for too much new credit at once.

Credit score

Kansas City Fast Cash Loan Types

It pays to know the types of cash loans available when you need a fast cash loan in Kansas City.

Millions of consumers throughout the United States turn to a fast, short-term loan when money is tight. Fast cash loans can be a solution for consumers from all walks of life, including consumers with excellent credit who could qualify for a traditional bank loan but do not have the time for a lengthy underwriting process. Consumers who need cash quickly to cover an emergency, such as car repairs or a utility bill, have several options available.

Unsecured Loans
Unsecured loans usually have the highest interest rates because these loans require no collateral. This means the lender has nothing to repossess to recoup their losses if the borrower fails to repay the loan. The most common types of unsecured loan are credit cards and personal bank loans, the latter of which can take more than a month to close.

Secured Loans
Secured loans, on the other hand, are secured by collateral. When collateral is provided to back the loan, the lender can repossess the property — whether it’s a vehicle, a home, or other valuable — if the borrower does not meet their responsibilities. Secured loans usually have the best interest rates because they offer the lender a way to get their money back.

There are two common types of secured loans most consumers are familiar with. The first is a home equity loan or line of credit, which may be used to consolidate debt, finance home repairs, or cover emergency bills. This type of loan involves borrowing money against the borrower’s home equity. If the borrower fails to repay the loan, the lender can repossess the home. Installment loans are also common. This type of loan may be used to finance a big purchase like a car or a home.

Kansas City Car Title Loans: A Fast Cash Solution
Most of the loan types explained above require underwriting and closing, which usually takes several weeks. One of the few options available to consumers who need cash quickly is a car title loan. Title loans are short-term, secured loans with no minimum credit score necessary.

Waldo Financial, a Kansas City car title loan provider, offers title loans to consumers who need cash and can’t wait for a bank, as well as consumers who can’t qualify for a traditional loan. Waldo Financial offers a fast and easy application process that requires minimal documentation. Applicants who have a vehicle with equity and sufficient income to make their monthly payments may be eligible for a title loan with cash in hand in as little as two business days.

Should You Repay Your Kansas City Car Title Loan Quickly?

Kansas City car title loans are short-term secured loans. The amount you can receive is based on the equity in your vehicle and what you can afford to repay, not your credit. Despite its short-term nature, a Kansas City car title loan may have a term of anywhere from one month to years. As with any loan, you have the option of following your payment schedule — whether it is bi-weekly or monthly payments — or working to pay off your loan early.

Unfortunately, not all car title loan providers are equal.

Some car title loans penalize borrowers with a fee for making additional payments or paying more than the minimum due. Some even have balloon payments that make it almost impossible to pay off your loan fast. As you shop for a car title loan, it’s important to choose a lender like Waldo Financial that values customer service and allows you to repay your loan early without penalizing you. After all, you shouldn’t be forced to pay a fee for being financially responsible!

If you don’t get a car title loan with a prepayment penalty, there is one major advantage to repaying your loan quickly: you can save a substantial amount of money by reducing the interest you need to pay. Paying off the loan ahead of schedule also frees up more of your money each month so you can start building an emergency fund to plan for life’s surprises in the future.

There are several steps you can take to repay your loan early with additional monthly payments or paying more than the minimum due. Here are some tips:

  • Reduce your expenses. You probably have many expenses that are slowly draining money from you each month. Do you stop for a morning coffee? The average person who buys coffee regularly spends $36 a month. You may also have a gym membership you don’t use to save about $35 a month. Switching from cable to a streaming service like Netflix can also save you around $50 per month.
  • Save 10% from each paycheck. The easiest way to pay off your loan is putting aside 10% of every paycheck toward an additional monthly payment.
  • Pick up a side job. If you’re serious about paying off your loan fast or getting debt-free completely, consider a side job. You may be able to sell produce at the farmer’s market, cut grass on the weekend, or babysit kids to earn extra money.

The best way to get your Kansas City car title loan paid off quickly and save money is working with a reputable title loan provider like Waldo Financial that offers flexible terms that work best on your schedule. You may be able to change the terms of your loan as well to switch from monthly payments to bi-weekly payments. Even if the payment amount each month is the same, your loan will still be paid off early because some months have five weeks.