No one wants to experience financial hardship, but unfortunately, it can happen to anyone. If you are in need of cash fast, taking out a title loan is one of the best ways to get the money you need to resolve your financial problems. But before you search for a “title place near me,” it’s important to understand the basics about title loans.
What Are Title Loans?
Title loans, which are also known as car title loans or auto title loans, are secured loans that borrowers can obtain by using the title to their vehicle as collateral. You can use the title to a car or motorcycle to get cash with a title loan.
If you are approved for a title loan, the lender will put a lien on the title to your vehicle. This does not mean that the lender will immediately take possession of the vehicle, though. You can continue to use the vehicle while you make payments to the lender. However, if you fail to make consistent, on-time payments, the lender can take possession of your vehicle.
The lien will be removed from your title once you have finished repaying the loan.
What Will You Need to Apply For A Title Loan?
Before visiting a title loan place near you, it’s important to know what you will need to apply for this type of loan. Some of the documents you will need to apply for a title loan include:
- A title to a vehicle that has your name on it. You can still apply for a title loan if another person’s name is on the title as long as yours is listed on it as well
- A government-issued ID
- Proof of income
- Proof of residence
- Interior and exterior photos of your vehicle
Lenders may require additional documentation depending on the type of loan you are seeking. Work with your loan specialist to find out what documents you need to submit to ensure your application is processed as quickly as possible.
Are You Eligible For A Title Loan If You Still Owe Money On Your Vehicle?
If you still owe money on your vehicle, you may be wondering whether you should even bother visiting a title place near you to obtain a loan. Fortunately, you can still qualify for a title loan even if your car is not completely paid off. In fact, many people who still have a handful of payments left on their vehicle are approved for title loans.
How Much Can You Borrow With A Title Loan?
It’s important to understand how much you will be able to borrow before deciding whether or not a title loan is right for you. The amount you are able to borrow will vary depending on several factors, including:
- Your vehicle’s value
- Your equity
- Your ability to repay
Your Vehicle’s Value
The value of your vehicle will play a significant role in determining how much you are approved to borrow through a title loan. The lender will assess the year, make, model, condition, and mileage of your vehicle to determine how much it is worth. Then, the lender will allow you to borrow a certain percentage of this value.
Your equity will also impact the amount of your loan. Equity is defined as the difference between the resale value of your vehicle and the amount you still owe on it.
For example, if your car has a resale value of $8,000, but you still owe $1,500 on it, your equity is $6,500. The lender will allow you to borrow a certain percentage of your equity, not the full resale value of the vehicle. This ensures that the lender will be able to recoup their money if you stop making payments and they take possession of your vehicle.
Your Ability to Repay
The final factor that will be used to determine the amount you can borrow is your ability to make payments. You will need to submit proof of income during the application process so the lender can determine how much you can afford to borrow.
This ensures that the lender does not allow you to borrow more than you can afford to repay with your current income.
Can You Get A Title Loan If You Have Bad Credit?
Borrowers with poor credit may find it difficult to get approved for a traditional loan. But your credit does not need to be perfect in order to qualify for a title loan. This is because title loans are secured loans, which means they are backed by the title to your vehicle.
Using the title to your vehicle as collateral makes the transaction less risky for the lender since they know they can recover their money by taking possession of your vehicle. Because it is a low-risk transaction, lenders are generally more willing to lend money to borrowers with a poor credit history.
To put it simply, it is possible to qualify for a title loan even if you have poor credit. Don’t let a low credit score stop you from applying for a title loan to get the cash you need.
How Will A Title Loan Affect Your Credit?
You should know how obtaining a title loan will impact your credit prior to visiting a lender.
Title lenders typically submit information to major credit bureaus. This means if you are approved for a title loan, the payments you make will be reported to the credit bureaus.
If you make consistent, on-time payments, this could improve your credit score, which will make it easier for you to borrow money again in the future. But if you make late payments—or completely miss payments—this could lower your credit score.
How Can You Spend the Money You Borrow Through A Title Loan?
If you are approved for a title loan, you can spend the money in any way you desire. The lender will not establish rules or restrictions on how the money is used. This freedom to use the cash in any way you see fit is one of the many benefits that title loans offer to borrowers.
How Can You Get A Title Loan?
Applying for a title loan is not difficult. Here are the four steps you will need to follow:
- Start the application process by calling us or filling out the form on the top of our website.
- The next step is creating your loan with the help of a loan specialist. If you call us, you can speak directly to a loan specialist. But if you fill out a form on our website, one of our loan specialists will contact you as soon as possible to discuss your loan terms.
- If you are satisfied with the loan terms, you will need to submit the required documentation to finalize your loan. Your loan specialist will tell you what documents you will need to provide. All documentation can be submitted via fax, email, or text.
- The final step is collecting your cash. You can pick up your cash or receive it via check or wire transfer. Choose whichever option is the most convenient for you.
That’s all it takes to get the cash you need as quickly as possible with a car title loan.