It’s important to understand the ins and outs of title loans before submitting an application to a title loan company near you.
A title loan is a type of secured loan that you can obtain by using the title to your vehicle as collateral. If you are in need of fast cash, a title loan might be the solution. But there are a lot of myths and misconceptions out there about title loans, which can make it hard for you to determine whether or not this is a good option for you.
It’s time to separate fact from fiction. Here’s the truth behind some of these common myths about title loans:
Myth #1: You Will Lose Your Vehicle If You Take Out A Title Loan
A lot of people think that they will need to hand their lender the keys to their vehicle once they are approved for a title loan. But the truth is you do not need to give up your vehicle in order to secure cash through a title loan.
If you are approved for a title loan, the lender will put a lien on the title to your vehicle. However, your vehicle will remain in your possession while you pay off your loan. Once your debt is completely paid off, the lien will be removed from your title.
You will only lose possession of your vehicle if you fail to pay off your loan. If you stop making payments, the lender has the right to take possession of your vehicle to satisfy your debt.
Myth #2: You Need Good Credit to Qualify For A Title Loan
Traditional lenders often have minimum credit score requirements, which means you may not qualify for these loans unless you have a near-perfect credit history. But you may qualify for a title loan even if you are not not approved for a traditional loan due to your credit score.
Title loans are secured by collateral, which means lenders don’t take on as much risk when lending to borrowers with less-than-perfect credit scores. Because of this, an applicant’s credit score isn’t the sole factor when determining whether or not they are eligible for a title loan.
This doesn’t mean that your credit won’t impact your eligibility for a title loan at all. It simply means that it will not have as big of an impact on your eligibility as other factors, including the value of your vehicle and your ability to repay the loan.
Myth #3: You Must Be Employed to Qualify For A Title Loan
You shouldn’t assume that you will not qualify for a title loan simply because you are currently unemployed. There are several different eligibility requirements that you must meet in order to qualify for a title loan, but being employed is not one of them.
During the application process, the lender will ask you to submit proof of your income. This allows the lender to verify that you have a regular source of income that you can use to make payments on your title loan if you are approved.
But your income source does not need to be a job. Many borrowers are approved for title loans by providing proof of other forms of income, including veterans’ benefits, disability benefits, or retirement benefits.
As long as you have some type of regular income, you may still qualify for a title loan regardless of your employment status.
Myth #4: Your Car Must Be Completely Paid For to Secure A Title Loan
You don’t need to wait until your vehicle has been completely paid off to apply for a title loan. Many borrowers who are approved for title loans are still making payments on the vehicle that they use as collateral.
However, the amount you owe on your vehicle could impact your eligibility. In general, you must have equity in your vehicle in order to qualify. Equity is the difference between the resale value of your vehicle and the amount you still owe on it.
If the resale value of the vehicle is greater than the amount you owe on it, you may still qualify for a loan. For example, if the resale value is $10,000 and you owe $7,000, this means you have $3,000 in equity and may qualify for a title loan.
Myth #5: Taking Out A Title Loan Will Hurt Your Credit
Some people are hesitant to apply because they have heard that taking out a title loan can hurt their credit. Taking out any type of loan, including a title loan, can negatively affect your credit score because it means you are accruing additional debt.
However, you shouldn’t let this stop you from getting the cash you need to cover your expenses. Why? In the long run, a title loan may actually improve your credit score.
Title lenders report to all of the major credit bureaus, which are the agencies responsible for calculating and updating your credit score. Your payment history has a major impact on your credit score, so making regular, on-time payments on a title loan could lead to an increase.
Taking out a title loan could give you a better credit mix, which is another factor that impacts your overall credit score. Having a diversified credit mix can increase your credit score, so obtaining a title loan might give you a slight boost.
Myth #6: It Takes A Long Time to Get Approved For A Title Loan
It can take a long time to get approved for a traditional loan. Even if you are approved after a few days, it may still take several additional days to actually get the money. In total, it can take up to 10 business days to complete the process of securing cash through a traditional loan.
But many people can’t afford to wait 10 business days for the cash they need today. If you are in this situation, applying for a title loan might be your best option.
It only takes a few minutes to apply for a title loan, so you won’t need to spend hours or days filling out stacks of paperwork. Once your application has been submitted, it will be processed right away. Many borrowers are given same-day approval, so they can get the cash they need on the same day they submit their title loan application.
You can avoid lengthy delays in the approval process by submitting all required documentation as soon as possible. This will ensure the lender has everything they need to quickly review and approve your application.
Myth #7: Every Title Loan Company is the Same
Perhaps the biggest misconception is that every title loan company is the same so it doesn’t matter which one you choose. This could not be further from the truth. If you are considering applying for a title loan, it’s important to do your research to find the best title loan company near you.
INeedCashNow has been in business since 2001 and has helped thousands of people secure the cash they need to make ends meet. We offer competitive rates, flexible payment terms, and outstanding customer service to make the lending process as easy as possible for you. Find out if you qualify for a title loan by calling 855-713-6522 or filling out the form on our website today.