If you find yourself in a financial pinch and need cash fast, you might be wondering what types of loans you can.
It can be a stressful experience to apply for any type of loan. It can be even more stressful when applying for a secured loan where you are borrowing against your personal property. In the case of a car title loan, you are borrowing against the value and equity of your own car.
But that’s not all you’ll need to get yourself a car title loan.
Before we go over what you need in order to take out a car title loan, let’s break down exactly what they are and how they work.
What title loans are and how they work
The basics of a car title loan are really quite simple. A car title loan means you are borrowing from a lender based on the value of your car. In order to lake out a loan against your car, you need to have equity in your car.
Once the has been established, the lender will decide how much they are willing to lend you. Car title loans typically range between $100 and $5,500. They can, however, go much high and depending on the value of your car, you could qualify for a loan up to $50,000.
While the amount of your is based on the equity that you have in your car and the value of that car, do not expect to get a loan that is equal to the actual worth of the car. Lenders want to make sure that they’ll be getting their money back, so they will lend you only what they can get quickly and easily in exchange for your car in the event that you default on your loan. The vast majority of lenders will offer you a loan equal to the trade-in-value of your car, that is typically between 30 percent and 70 percent of your car’s actual market value.
Now that we know how they work, let’s go over what you need in order to qualify.
What I’ll need to take out a title loan
Most companies have specific requirements and they are typically the same requirements no matter what state or region you are living in. Overall, you can expect to be asked to provide information on the following list:
- You must be at least 18 years old
- You must be able to provide a government issued ID.
- There must be no liens on the vehicle you are borrowing against.
- You must own the vehicle outright.
- You must have the original title of the vehicle.
If you think this information is incredibly easy to provide, you’d be right. Car title loans are famously easy to get, which is what makes them so popular. It’s also what makes them so risky for irresponsible borrowers who take out more than they can pay back within they payment term.
One thing to keep in mind about title loans is that whether you are applying online or applying in-store it is important that you have all your materials handy when you begin your application. If you are truly looking to get your cash loans as quickly as possible, you have to do your part in making sure things run smoothly as well.
Don’t go to an in-store lender with just some of the information. It is actually smart to call ahead and find out exactly what they’ll need in order to grant you a loan. If you are unable to get your hands on your title, some lenders are willing to help you get yours. Title lenders want to make your life easier, but you have to meet them halfway.
What else I might need to get a cash loan for my car title.
The aforementioned requirements are considered to be the baseline of documentation in order to take out a title loan, but some lenders are far stricter. Depending on which lender you want to borrow from, you could be expected to divulge quite a bit more information.
For example, some companies will require that you prove that you make enough money on a monthly basis to pay back your loan within the repayment period (typically repayment periods are 30 days, but they can range to over a year depending on the company). That doesn’t necessarily mean you need a job, however. If you don’t have income from a job, you can use the following as proof that you will be able to afford paying back your loan.
Documents such as disability, pensions, a retirement account, social security, or unemployment benefits can also be used.
On top of that, you may not even need a bank account to be approved for a loan. Some lenders are incredibly flexible when it comes to the necessary documents. While many do ask for bank account information, others are more flexible about it.
Finally, you might be wondering how your credit score may impact your ability to take out a car title loan.
Title loans and my credit score
Whether or not you are subject to a credit score check before you are approved for a loan depends on the company you are attempting to borrow from. Some lenders require no check. Other’s make a credit card check a of granting a loan.
Primarily, it is important to remember that most car title loans are predominately based off the value of your car.
What a credit score check is typically for is so that lenders can try to predict whether or not you will be able to pay back your loan. Bad credit is rarely a deal breaker, but good credit could give you the opportunity to enjoy better interest rates and more favorable repayment options.
Now that you have a basic idea of what you will need to take out a car title loan, it is up to you to find the best lender in your state in terms of amount they are willing to lend, interest rates, and payment terms. Hopefully, this helps you on your way to a better financial future ahead!