If you need fast cash, your options may be limited. This may be especially true if you don’t typically qualify for a traditional personal loan or don’t have friends or family members who can lend you the cash. It may seem like you have exhausted all your options, but that’s not the case. If you are in this situation, applying for a title loan might be the solution. How do car title loans work? Here’s what you need to know:
What Is A Title Loan?
Title loans are not like traditional personal loans. A title loan is a secured loan, which means it is backed by collateral. If you want to take out a title loan, you must use the title to your vehicle as collateral. Some lenders accept titles to RVs and motorcycles as collateral, too.
You won’t have to give up your vehicle to borrow money with a title loan. Your vehicle will remain in your possession so you can continue to drive it while you make payments. Your lender will put a lien on your vehicle’s title, which will be removed once your loan has been paid in full.
Why Do People Take Out Auto Title Loans?
No one ever expects to run into financial trouble, but life is unpredictable, so even the most careful planner may find themselves short on cash. This can occur as a result of changes in the household such as a divorce or new baby. Many people also experience financial problems when they incur unexpected expenses related to car repairs, household repairs, or medical bills.
People who are in situations like these often rely on title loans to get the fast cash they need to cover their expenses and make ends meet.
What Do I Need for A Title Loan?
If you’re thinking about applying for a title loan, the first thing you should do is determine your eligibility. You may be eligible for a title loan if you meet these conditions:
- You are at least 18 years old.
- You own a vehicle.
- You are willing to consent to a credit check.
- You have auto insurance on the vehicle you want to use as collateral.
- You have a reliable source of income.
If you meet these conditions, you may want to apply for a title loan. Your lender will need to see certain documents to process your title loan application. Some of the documents you may need to submit include:
- The title to your vehicle.
- Proof of auto insurance.
- Proof of residence such as utility bills, lease agreement, or driver’s license.
- Driver’s license or another type of government-issued ID.
- Proof of income such as pay stubs, recent tax documents, or bank statements.
These requirements can vary, so your lender may ask for additional documentation to process your application. If you are having trouble finding some of these documents, ask your title lender for assistance.
How Much Can I Borrow with A Title Loan?
Title lenders can lend borrowers approximately between $2,510 to $50,000 per title loan. However, the amount you are approved to borrow will depend on several factors, including your vehicle’s resale value, your equity in your vehicle, your state’s legal limits and your ability to repay the loan.
Your vehicle’s resale value is based on its make, model, year, condition, mileage, and trim level. You can use a free online tool like Kelley Blue Book to get a rough estimate of how much your car is worth. You can also get a quote from your title lender.
After determining the resale value, your lender will need to calculate your equity in the vehicle. To calculate your equity, subtract the amount you still owe on your vehicle from your vehicle’s resale value.
For example, if your car’s resale value is $10,000 and you owe $2,000 on it, this means you have $8,000 in equity.
You cannot borrow more than the value of your vehicle, and you must have some equity. Your lender may only allow you to borrow up to a certain percentage of your vehicle’s value.
Your ability to repay the loan will play a role in determining how much you can borrow, too. Your title lender will not allow you to borrow more than you can afford to repay.
The bottom line is title loan amounts vary widely. To find out how much you can borrow, contact your title lender today.
Can I Use My Car as Collateral for A Title Loan If I Still Owe on It?
You may qualify for a title loan even if you are still making payments on your vehicle.
Your eligibility will depend partly on how much you still owe on your vehicle at the time you apply for a title loan. You must have equity in your vehicle to qualify for a title loan. This means the resale value of your vehicle must be greater than the amount you still owe on it. If you owe more than your vehicle is worth, you cannot use the title to this vehicle as collateral for a title loan.
Discuss the details of your remaining payments with your title lender to find out if you still qualify for a title loan.
How Long Do I Have to Pay Back A Title Loan?
The amount of time you are given to repay a loan is known as the loan term. A title loan’s term can vary. But in general, title loans are generally shorter-term loans, so their terms can range from one month to several years.
Do Title Loans Go on My Credit?
Most title lenders report to the major credit bureaus, which are the data collection agencies that provide consumer credit reports. If you take out a title loan, the loan itself may be reported to these agencies. Every payment you make on this title loan could also be reported to the credit bureaus. This means other creditors will be able to see your title loan information when they check your credit.
If you want to improve your credit score, make regular, on-time payments on your title loan. Remember, every payment you make is reported to the credit bureaus. According to an article on Credit.com titled, “How to Improve Your Payment History on Your Credit Report,” payment history accounts for about 35% of your overall credit score, so consistently making on-time payments on your title loan can improve your score.
What Are the Benefits of Car Title Loans?
There are countless benefits to getting cash with a car title loan, including:
- Easy application. You won’t need to fill out dozens of pages of paperwork to apply for a title loan. The application process is usually quite simple and straightforward. Plus, most lenders allow you to complete the entire application process online or over the phone.
- Potentially faster processing times. Title loans are usually processed quickly, so you likely won’t need to wait for weeks to get the cash you need right now.
- Most credit types are accepted. Many people who are denied traditional personal loans due to their credit are approved for title loans.
- You will keep your vehicle. You won’t need to give the lender the keys to your vehicle in order to use it as collateral for a title loan. You will remain in possession of your vehicle while you repay your loan.
- Fast cash. You will have access to your cash shortly after you are approved for a title loan. Therefore, title loans are ideal for people who need to get cash as soon as possible.
How to Apply for Car Title Loans Online
Applying for a car title loan is easy. You can complete your application without ever stepping foot outside of your house. If you’re ready to apply for a car title loan online, consider applying with I Need Cash Now. Here’s how to do so:
- Get in touch with one of our loan officers. You can either call us at 855-713-6522 or fill out the form on our website and wait for a loan officer to contact you. Your loan officer will need some basic information about your vehicle, including its make, model, year, and mileage. Be prepared to provide this information when you speak to the loan officer.
- Find out if you are approved for a title loan. It only takes a few minutes to determine if you are approved for a loan and if so, how much you can borrow. Your loan officer will provide other details about your loan, including your interest rate and loan term.
- Submit and sign paperwork. If you’re satisfied with the terms, you will need to finalize your loan by signing the appropriate paperwork. You will also need to submit certain documentation to your lender. Your loan officer can explain what documents need to be submitted and the best way to submit them.
- Collect your cash. If approved, you can come pick up your cash in person at one of our trusted partners’ locations or have the money sent directly to you via check or wire transfer.
Don’t wait any longer to get the cash you need–start your title loan application today.