How Owning a Car Can Help You Leverage a Future Loan

Did you know that owning a car can help you leverage a future loan and build up your credit rating at the same time? One option is to use your car title for a title loan, which uses your car as collateral for a short-term loan, putting cash in your hand immediately and helping to rebuild a low credit rating by making regular monthly payments. If you already own a car, you’re well on your way toward taking care of financial emergencies or large purchases with a title loan – if you don’t own a car yet, apply for financing through Green Light Auto Credit to make your next vehicle easily affordable. When you take the right steps, you can put yourself in a position to leverage your credit in no time!

Why Leverage Your Credit?

Before you can leverage your credit, you will of course need to raise your credit score. In the coming sections, we’ll provide more information on how a title loan, when handled responsibly, can help you raise your score. But first, let’s answer a common question: why leverage your credit? The answer is simple! Once you’ve put in the effort to get a credit score of 760 or higher, you can put it to work to help you pay off debts or make long-term investments. Essentially, if you have a high credit score and you don’t leverage your credit, you’ll be putting it to waste.

How to Leverage Your Credit

When applying for future loans or credit cards, shop around to ensure you get the best rate possible. Lenders are prepared to give the best rates to individuals with good credit because they want your business as a low-risk borrower.
Get a credit card that offers rewards, such as cashback, points, or travel rewards. The best rewards cards are reserved for those with good credit.
Refinance your loan(s). You can use your good credit rating to refinance your mortgage, auto loan, etc. to get a better interest rate and lower the total amount that you pay.

The Ins and Outs of Title Loans

A title loan is a short-term loan made using the title of your car as collateral. Here’s what you need to know about how they work:

Most title loans can be processed in minutes and put cash in your hand soon after.
Because of the quick turnaround time, these short-term loans are typically used for financial emergencies.
Paying off a title loan on time can help build up a bad credit rating.

Basically, these special types of loans give drivers access to quick cash when they need it the most. If handled responsibly and paid off on time, a title loan can help build your credit while also getting you out of a financial jam. However, there are also certain risks that come with title loans:

Because you’re using your car as collateral, if you’re unable to pay off the title loan on time, your car could be repossessed.
Title loans usually have high interest rates.
If you’re already late on other payments and bills, a title loan can lead you even further into debt.

Can I Do a Title Loan on a Financed Car?

What if you’re not yet the full owner of your car? Can you do a title loan on a financed car? Yes, but the amount you owe on the vehicle needs to be less than what it’s currently worth. This is known as having positive equity.

Learn More About Equity

One of the other big advantages of owning a car is that it gives you a certain level of equity. Not only can you borrow against it, you likely used a loan to purchase it in the first place, which helped to build up your credit. If you don’t yet have the title for your car, an auto equity loan can be made as well, solving short-term financing solutions based on the value of your vehicle.

Let Green Light Auto Credit Help You Finance

Green Light Auto Credit is proud to be your go-to destination for all things related to financing and automobiles. We are proud to help drivers of all credit backgrounds finance new or pre-owned cars, and whether you have bad credit or no credit, one of our finance experts will work hard to find the best APR for you. And after you own that car, you can use it as collateral to help get through a financial emergency without sweating it.

Learn More About Title Loans With the Help of Green Light Auto Credit

To learn more about title loans or plan your next auto loan, contact Green Light Auto Credit online. We think you’ll be surprised by all of the options available to you, even with bad credit or no credit.