Life is unpredictable. No matter how carefully you plan your budget, unexpected expenses could arise and put a strain on your finances. If you’re in this situation, taking out an auto title loan might be a great way to get the cash you need.
An auto title loan, which is often called a car title loan or simply a title loan, is a type of secured loan that allows the borrower to use the title to their car, RV, or motorcycle as collateral. Title loan applications can be processed and approved quickly, which is why these loans are ideal for people who need cash fast.
Before you start the application process, you may want to learn about the eligibility requirements to determine whether or not you will qualify for an auto title loan. Here’s what you should know:
What is Needed For An Auto Title Loan?
Every lender will require borrowers to submit certain types of documentation during the application process. The exact requirements may vary slightly from lender-to-lender. But in general, this is what you will need to provide to apply for a title loan:
- Title to your vehicle
- Driver’s license or government-issued ID
- Proof of income
- Proof of residence
- Photos of your vehicle
You must also be at least 18 years old to obtain an auto title loan.
What If I Can’t Find the Title to My Vehicle?
You need to submit the title to your vehicle to your lender as part of the application process. But you shouldn’t give up on getting a title loan if you can’t find the title to your vehicle.
You have several options if you want to apply for a title loan, but your title is missing or damaged. The first option is contacting the Department of Motor Vehicles (DMV) in your state to find out how you can order a replacement title. You may need to fill out paperwork and pay a small fee, but that’s typically all it takes to get a new title.
The second option is contacting the title lender for assistance. Title lenders may be able help you with the process of tracking down your missing title.
Can I Get An Auto Title Loan With A Salvage Title?
If your vehicle has a salvage title, this indicates that it has suffered extensive damage in the past. For example, the vehicle may have been badly damaged in an accident or flood or as a result of a criminal act. The title is used to notify future potential buyers of the damage that the vehicle has sustained in the past.
In most states, a vehicle is given a salvage title when it is deemed a total loss by an insurance company. A vehicle is considered a total loss when the cost of repairing its damage exceeds a certain percentage of the value of the car.
It is far too difficult to estimate the value of a vehicle with a salvage title. For this reason, salvage titles likely cannot be used as collateral to secure car title loans. If your vehicle has a salvage title, you may not qualify for an auto title loan unless you have another car, RV, or motorcycle to use as collateral.
Can I Get An Auto Title Loan With No Proof of Income?
Title lenders need to see proof of income in the form of tax returns, pay stubs, or other documentation during the application process. This allows the lender to verify that you have a reliable source of income that can be used to repay your debt.
You typically cannot get approved for an auto title loan without providing proof of income. However, it’s important to clarify that this does not mean you need to be employed in order to get approved for an auto title loan. If you’re unemployed, you may still qualify for a title loan if you have another source of income.
Can I Add A Co-Signer to My Title Loan?
You can add a co-signer to your title loan if you don’t think you will get approved on your own. A co-signer is an individual who agrees to add their name to your loan, which means they are legally responsible for your title loan payments in the event you are unable to pay them.
Even if you can get approved for a title loan on your own, you may want to consider adding a co-signer if your credit score is low. Adding a co-signer with good credit may help you secure more favorable loan terms, including a lower interest rate.
A co-signer must be willing to sign a credit application and provide proof of income and residence to the title lender. This information will be kept private, which means you won’t have access to your co-signer’s information and your co-signer will not have access to your information.
Can I Get A Car Title Loan With Bad Credit?
You will need to consent to a credit check during the application process. Many people assume that if a title lender performs credit checks, it means they don’t approve applicants with bad credit. But that’s not always the case.
Title loans are secured by collateral in the form of the title to your vehicle. Because the loan is secured by collateral, lenders don’t take on as much risk when lending to borrowers with less-than-perfect credit. After all, if the borrower stops making payments, the lender can satisfy the debt by taking possession of their vehicle and selling it to cover the balance of the loan.
Your credit score will still play a role in determining whether or not you are eligible for an auto title loan. But when the lender reviews your application to determine eligibility, your credit score may not be as important as the value of your vehicle or your ability to repay the loan.
Can I Get A Title Loan If I Still Owe Money On My Vehicle?
If you’re still making payments on your vehicle, you may or may not qualify for a title loan depending on how much you still owe. The resale value of your vehicle must be more than the amount you still owe on your vehicle.
For example, say your car’s resale value is $10,000 and you still owe $3,000 on it. In this case, the fact that you still owe money on your vehicle will not automatically make you ineligible for a title loan.
But if your vehicle is worth $4,000 and you still owe $4,500 on it, you would not be likely to be eligible for an auto title loan since the amount owed is greater than the resale value.
Can I Get An Auto Title Loan If Someone Else’s Name Is On the Title?
You cannot use the title to your vehicle as collateral unless your name is on it. However, your name does not need to be the only name on the title to the vehicle. If someone else’s name is on the title to your vehicle, you may still qualify as long as your name is also included.
You should qualify for an auto title loan as long as you meet all of these eligibility requirements. But if you’re still not sure whether or not you meet the requirements, feel free to contact a title lender to discuss your unique situation.