Even if you carefully follow a budget, a sudden expense or emergency can throw a wrench in your finances. It can happen to anyone. In fact, nearly 50% of consumers in the U.S. have experienced at least one unexpected financial setback within the last three months.
If you are in this situation, it’s important to know where to turn to for the cash you need to make ends meet. The solution to your financial troubles might be a title loan. What’s a title loan? How much are you eligible to borrow? Here’s what you need to know:
How Does A Title Loan Work?
Title loans are also known as car title loans or vehicle title loans. They are secured loans, which means they are supported by collateral. If you want to borrow money through a title loan, you must use the title to your car as collateral. Some lenders will also accept the title to an RV or motorcycle as collateral for a title loan.
What Happens to Your Car If You Get A Title Loan?
Some people worry that they won’t be able to use their vehicle if they take out a title loan, but that’s not the case. You can continue to drive your vehicle while you make payments on your title loan. Since your vehicle is used as collateral, the lender will put a lien on the title until your loan has been completely paid off. Once your loan is paid off, the lender will remove the lien.
However, if you fail to make payments on your title loan, the lender has the right to take possession of your vehicle to satisfy your debt.
In other words, you will remain in possession of your vehicle as long as you comply with the terms of your title loan agreement.
Is It Easy to Get A Title Loan?
The process of applying for a title loan is simple and straightforward. Title loans are usually processed quickly, which means you won’t need to wait a long time to find out if you are approved and get the cash you need.
It is easy to apply for a title loan, but you still need to meet certain requirements in order to get approved. Fortunately, the eligibility requirements for a title loan are very different from the eligibility requirements for a traditional personal loan. This means you may qualify for a title loan even if you weren’t approved for a traditional personal loan due to your credit.
You may qualify for a title loan if you meet the following requirements:
- You are at least 18 years old.
- You own or partially own a vehicle, which means your name is on the title.
- You have a reliable source of income.
- You will consent to a credit check.
- You have equity in your vehicle.
The eligibility requirements may vary from lender-to-lender, so it’s best to contact your title lender to find out if you qualify.
Can I Get A Title Loan Without Proof of Income?
You will be required to submit a number of documents to the lender when applying for a title lender, including pay stubs, recent tax returns, or bank statements that serve as proof of income.
Your lender will need to see these documents to verify that you have a reliable source of income. These documents are also used by the lender to determine how much you can afford to repay.
However, it’s important to note that “proof of income” does not mean “proof of employment.” You do not need to be employed to get approved for a title loan. But if you are unemployed, you must have another reliable source of income such as veterans’ benefits, disability benefits, or workers’ compensation benefits.
How Much Can You Get From A Title Loan?
Title lenders can lend anywhere from $2,510 to $50,000 per title loan. The amount you are approved to borrow, however, will depend on various factors, including:
- Your ability to repay the loan: Remember, your title lender will need to see proof of income to determine how much you can afford to repay. This evaluation will affect how much you are approved to borrow.
- Your vehicle’s resale value: Because your car is used as collateral, your lender will need to know how much it is worth before deciding how much you can borrow. Your lender will calculate its resale value based on its make, model, year, condition, mileage, and trim level.
- Your equity: Your equity is calculated by subtracting the amount you owe on your vehicle from your vehicle’s resale value. You are typically allowed to borrow up to a certain percentage of your equity in your vehicle.
If you’re curious about how much you can get from a title loan, contact your title lender. It only takes a few minutes to get a free quote. All you need to do is provide some information on your vehicle and income.
Do Title Loans Help Your Credit?
If you are thinking about applying for a title loan, you may wonder how this decision will impact your credit.
Taking out new loans, including title loans, could have a negative impact on your credit since you are incurring new debt. But in the long run, taking out a title loan could actually improve your credit.
Your title lender will report information on your title loan payments to the main credit bureaus, which are Experian, TransUnion, and Equifax. Payment history has a huge impact on your overall credit–it accounts for about 35% of your total score. If you make on-time payments on your title loan, this could improve your credit score over time. However, if you miss or make a late payment, this could hurt your credit.
Another factor that impacts your overall credit is your credit mix, which is the diversity of your credit accounts. This factor accounts for about 10% of your overall credit score. If a title loan makes your credit mix more diverse, this addition to your credit profile could improve your credit score.
How Can You Apply for A Title Loan?
If you are ready to apply for a title loan with I Need Cash Now, follow these simple steps:
- Start the application process by contacting our loan officers today. Call 855-713-6522 or submit your information via the form on our website to connect with a loan officer.
- Find out if you qualify. Your loan officer will ask for some basic information, including your vehicle’s make, model, mileage, and year. Then, your loan officer will tell you if you qualify based on the information you provide. You will also find out how much you are approved to borrow.
- Sign and submit the required documentation. If you are satisfied with the terms of your approval, finalize your loan by signing and submitting the required documentation to your lender. Your loan officer will guide you through this process to ensure you understand what documents are needed.
- Get the cash you need. You will have access to your cash shortly after your application is approved. You can choose to either pick up your cash in person or have it sent directly to you via check or wire transfer.
That’s all it takes to get the cash you need when you need it the most.