Numerous studies have shown that many adults in the U.S. struggle to cover unexpected expenses, such as car repair bills or medical emergencies.
It’s hard enough to make ends meet as it is, so these expenses can put a serious strain on your finances. If you’re in need of cash now, it’s important to consider all of your options, including car title loans.
What Happens Under A Car Title Loan?
A car title loan is a type of secured loan that allows borrowers to use the title to their vehicle as collateral. If you are approved for a car title loan, the lender will put a lien on the title to your vehicle while you make payments. The lender will remove the lien once the debt has been paid in full.
You won’t need to hand over the keys to your vehicle—you can continue to use your car while you repay the loan. However, if you stop making payments on your car title loan, the lender has the right to take possession of the vehicle to satisfy your debt.
What is Needed to Apply For A Car Title Loan?
The documents you will need to submit to apply for a title loan can vary on a case-by-case basis. But in general, every borrower should be prepared to submit:
- The title to the vehicle
- A driver’s license or government-issued ID
- Proof of income
- Proof of residence
- Photos of the vehicle
Your loan specialist will let you know if additional documentation is needed to process your application.
Can I Get A Car Title Loan Without A Title?
It is not possible to get approved for a car title loan without submitting a title to a car that is under your name. But this does not mean that you should give up on applying for a title loan if you can’t find the title to your vehicle. Instead, take the time to obtain a duplicate title to your vehicle.
The steps you will need to take to get a duplicate title will vary from state-to-state. It’s best to contact the Department of Motor Vehicles (DMV) in your state to find out what you will need to do to get a copy of your title.
Is It Hard to Get A Car Title Loan?
Having a low credit score can make it incredibly difficult to get approved for a traditional loan. But fortunately, a low credit score will not automatically make you ineligible for a title loan.
A title loan is secured by the title to your vehicle. Because these loans are secured by collateral, lenders will not need to rely as heavily on credit scores when determining a borrower’s eligibility. This means you can get approved for a title loan even if your credit score is low.
Can You Get A Title Loan If You Still Owe Money On Your Car?
Many people choose to finance the purchase of a new or used vehicle. If you are still making payments on your car, you may wonder whether or not you can qualify for a car title loan.
Your car does not need to be fully paid off in order to get a car title loan. If you only have a few payments left to make, you may still get approved for a loan. Discuss your situation with a loan specialist to find out if you qualify.
How Much Can I Get For A Car Title Loan?
The value of your loan will depend on several factors, including:
- How much your car is worth: The lender will not let you borrow more than what your car is worth. Lenders will only let you borrow up to a certain percentage of the value of your car. The value of your vehicle will depend on various factors, including its make, model, mileage, and condition.
- Income: You will not get approved for a loan that you cannot afford to repay, which is why your lender will analyze your income to determine how much you can get through a title loan.
- Laws and regulations: Some states have laws that govern the minimum and maximum amount of title loans. These laws can affect how much you are approved for when applying for a title loan.
Based on these factors, the lender may approve you for a loan that falls between $2,510 and $50,000.
Are Car Title Loans Worth It?
There are countless benefits to taking out a car title loan.
A car title loan is a great option for borrowers who are not eligible for other types of loans due to bad credit. All credit types are welcome to apply for car title loans.
Applications for car title loans are processed much faster than applications for traditional loans. This means you won’t have to wait weeks to find out if you are approved—you can quickly get the cash you need.
There are also no rules regarding what you can use the money from the loan on. You can spend this money in any way you please.
Some loans come with prepayment penalties, which means you will have to pay an additional fee if you choose to repay your debt earlier than expected. But this won’t happen if you obtain a car title loan. There are no prepayment penalties, so borrowers can pay their title loans as quickly as they’d like at no extra cost.
Will A Car Title Loan Impact Your Credit?
Many people worry that taking out a car title loan will negatively impact their credit score. But don’t let this stop you from getting the cash you need to make ends meet.
Title lenders report to credit bureaus. In other words, making on-time consistent payments on your car title loan can actually improve your credit score. The higher your credit score, the easier it will be to get new lines of credit from other lenders in the future.
How Can You Apply For A Car Title Loan?
You won’t need to fill out dozens of pages of paperwork in order to get a car title loan. Here are the four steps you will need to follow to apply for a title loan:
- Step 1: Submit your information over the phone or using the online form.
- Step 2: Discuss your loan with a loan specialist. The loan specialist will ensure you qualify for the loan and go over the details of the loan with you.
- Step 3: Submit the required paperwork to the lender via email, fax, or photos sent by text.
- Step 4: Get the cash you need
That’s all it takes to get the cash you need fast with a title loan!