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What is a Registration Loan?

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Not so very long ago, payday loans became a staple for people who needed cash fast. But overtime, lenders figured out that they still will have people lining up to get loans even if they raised the interest rates in outrageous percentages. For instance, there even was a time when it reached almost quadruple of the principal amount. Because of this trend, the government was forced to pass legislation that eventually made high interest rates illegal. This modification in the law came in the form of a cap on the interest rate. 

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But then again, creditors, as clever as they are, eventually figured out a way to get around the cap over payday loans. This way comes in the form of registration loans. In the most general sense, a registration loan is pretty much similar to regular payday loans except for very small or minor differences. Obviously, the difference lies in the requirement of having a vehicle that has to be registered under the name of the one who will apply for the loan. This is why it is called registration loan in the first place. 

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Furthermore, registration loans don't place lien on car titles. In other words, the creditor does not have the right to repossess the vehicle upon default. Now in order to make the arrangement feasible for the parties involved, lenders will be integrating specific contract clauses in order to make sure that there is a guarantee or some kind of security in the event that repayments are no longer possible. 

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With reference and in comparison to title loans meanwhile, a registration loan is different because the lender does not have the right to repossess the vehicle when the borrower defaults on the repayment. Likewise, the payment for the registration loan is to be due in full on the borrower's next pay date. It is also worthy to note that the amount borrowed won't be spread out in uniform monthly payments. 

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Furthermore, registration loans, at least most of them, won't require that a vehicle must have a clear and free title, plus there's no lien put on the vehicle the moment the borrower gets approved for the loan.

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Keep in mind that if you are getting a title loan instead and then you unfortunately fall behind on your monthly payments, what happens is that the lender will have the right to repossess your vehicle. The thing is the vehicle automatically becomes the lender's property and it will remain that way unless you have repaid the loan. This is where the registration loan becomes a lot more advantageous for the borrower like you. Please view this site http://www.ehow.com/about_4621980_what-personal-loan.html  for further details. 

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