Stressful situations such as car accidents, roof leaks, the sudden loss of a job, or medical emergencies can lead to financial trouble. If you’re struggling to cover the cost of unexpected expenses, a title loan might be the solution.
A title loan is a type of secured loan that allows you to borrow cash by putting up the title to your vehicle as collateral. Your lender won’t take your car if you are approved for a title loan, though. Instead, the lender will put a lien on it or hold onto the title until you are finished repaying your loan. In the meantime, you can continue to drive your vehicle as you normally would.
Because title loans are easier to qualify for and typically processed faster than traditional personal loans, they are ideal for people who need fast cash.
Before you search for “cash for car title loan near me,” you may want to know how much you will be able to borrow if you are approved. Title loans can range from $2,510 to $50,000. The amount you will be approved to borrow will depend on a number of factors, including:
Your Vehicle’s Resale Value
The title to your vehicle is used as collateral to secure your loan, which is why your vehicle’s resale value can impact how much you are approved to borrow. You cannot borrow more than your vehicle is worth. In fact, title loan companies typically allow you to borrow up to a certain percentage of your vehicle’s resale value.
The valuation process can vary depending on the lender. Some title loan companies ask applicants to bring their vehicle in for an inspection. Other lenders are willing to arrange an inspection at your home, workplace, or another convenient location. There are also title loan companies that will allow applicants to submit photos of their vehicle instead of getting it inspected.
Regardless of how your vehicle is inspected, the title loan company will analyze several factors when determining its value, including the make, model, year, mileage, condition, and trim level.
Type of Vehicle
Most title loan companies will accept a wide range of vehicles as collateral, including:
- Pickup trucks
The type of vehicle you use as collateral for your title loan can also impact how much you are able to borrow. For example, some title loan companies limit how much you are able to borrow if you use a motorcycle as collateral. On the other hand, RVs are usually worth more than other types of vehicles, so you may be able to borrow more by using an RV as collateral.
If your vehicle is not completely paid off yet, the title loan company will also consider the value of your equity when determining how much you can borrow. You cannot borrow more than the value of your equity in your vehicle.
Your equity is the difference between your vehicle’s resale value and the outstanding balance on your loan. For example, if your vehicle is worth $18,000 and you still owe $8,000 on it, you have $10,000 of equity ($18,000-$8,000=$10,000).
You must have equity in your vehicle to qualify for a title loan. In other words, if you owe more than your vehicle is worth, you cannot use your vehicle as collateral.
Your title loan company will not want you to borrow more than you can afford to repay. For this reason, the title loan company will ask you to submit proof of your income when you apply for a title loan.
Submitting these documents gives your lender the chance to analyze your income and determine how much you can afford to repay. The results of this analysis could impact how much you are approved to borrow.
The state in which you live could have an impact on how much you are able to borrow. This is because some states have passed laws that establish minimum and maximum amounts for title loans.
In Wisconsin, for example, the law states that a title loan company cannot issue a loan for more than 50% of the vehicle’s value, up to $25,000. The maximum limit is much smaller in other states such as Tennessee, where title loans are capped at $2,500.
Research the laws in your state to find out if where you live will impact how much you can borrow from a title loan.
It only takes a few minutes to find out how much you are approved to borrow. All you need to do is call 1-855-713-6522 and request a free loan estimate from I Need Cash Now.