Being short on cash can be stressful, especially if picking up an extra shift or cutting back on expenses isn’t enough to come up with the money you need. Fortunately, there are other options available, including title loans.
A title loan is not like a traditional personal loan. To borrow money through a title loan, you must be willing to use the title to your vehicle as collateral. You won’t lose your vehicle so long as you are currently on your payments. Your lender will put a lien on it or hold onto your title while you make payments, but you can continue to drive your vehicle as you normally would.
Because title loans are secured by collateral, they are much easier to qualify for than traditional personal loans. Title loans are also processed faster, which is why they’re ideal for people who need cash right away.
If you’re considering this option, you might be wondering, “How much can I borrow on a car title loan?” The answer to this question will depend on a number of factors. Here’s what you need to know:
How Much Can You Borrow on a Title Loan?
Title loan companies can issue between $2,000 to $50,000 per title loan. However, this does not necessarily mean that you will be able to borrow the maximum amount of $50,000. Title loan companies will determine how much each applicant can borrow on a case-by-case basis.
What Factors Affect How Much You Can Borrow on a Car Title Loan?
Your title loan company will consider a number of factors when determining how much you should be approved to borrow, including:
- Your Vehicle’s Resale Value
- Your Equity
- Your Income
- Your Location
Your Vehicle’s Resale Value
Your vehicle is used as collateral to secure your title loan, so the title loan company needs to know how much it is worth before determining how much you can borrow. For this reason, the title loan company will need to calculate the resale value of your vehicle during the application process.
Your title loan company may ask you to bring your vehicle in for an inspection at some point in the application process. However, some title loan companies will arrange to have your vehicle inspected at your home or workplace instead to make the process more convenient for you.
Others will even allow you to submit pictures of your vehicle instead of getting it inspected. This is the most convenient option since you won’t need to take time out of your schedule to get your vehicle inspected. Talk to your title loan company to find out what your options are when it comes to the inspection process.
Regardless of how it is inspected, the process of calculating your vehicle’s resale value is the same. Your title loan company will calculate your vehicle’s resale value based on its make, model, year, mileage, condition, and trim level.
You cannot borrow more than the value of your vehicle. In fact, most title loan companies will only allow you to borrow up to a certain percentage of your vehicle’s value.
If you are still making payments on your vehicle, your equity is another factor that will impact how much you are approved to borrow through a title loan. The term “equity” refers to the value of your ownership stake in your vehicle. To calculate your equity, subtract the amount you still owe on your car from your car’s resale value.
For example, say your vehicle’s resale value is $15,000 and you still owe $5,000 on it. This means you have $10,000 of equity in your vehicle ($15,000-$5,000=$10,000).
You may not be able to borrow more than the value of your equity if you are approved for a title loan. So, in this example, you would not be approved to borrow over $10,000.
You must have equity in your vehicle to qualify for a title loan. If you owe more than your vehicle is worth, you have negative equity, which means you may not use the vehicle as collateral for a title loan.
During the application process, the title loan company will ask you to submit proof of income such as recent pay stubs, tax returns, or bank statements. This way, the title loan company can confirm that you have a reliable source of income that can be used to repay the money you borrow. You must have a reliable source of income to qualify for a title loan.
Seeing this documentation also gives the title loan company an opportunity to evaluate your income and determine how much you can afford to repay. The results of this evaluation will impact how much you are able to borrow.
The state in which you live could also have an impact on how much you are able to borrow through a title loan. This is because a number of states have passed laws that establish minimum and maximum amounts for title loans.
All title loan companies must comply with these laws when issuing title loans to residents of these states. If you live in a state with these laws, they could impact how much you are able to borrow if you are approved for a title loan.
How to Find Out How Much You Can Borrow on a Car Title Loan
Now you know about the many factors that are taken into consideration when determining how much you can borrow. Fortunately, it’s easy to find out how much you will be able to borrow through a title loan from 1(800)CAR-TITLE®. Once you have this information, you can quickly complete your application and secure the money you need to make ends meet. Here’s what to do:
- Contact our loan specialists. You can either call us directly at 1-800-227-8485 or submit your information using the form on our website. If you submit an online form, a member of our team will reach out to you as soon as possible.
- Request a free loan estimate. You can find out if you are approved for a title loan and if so, how much you will be able to borrow by requesting a free loan estimate. To prepare your estimate, your loan specialist will need some information about your vehicle, including its make, model, year, mileage, and condition.
- Complete your application. If you’re satisfied with the terms of your loan estimate, complete your title loan application by signing and submitting the required documentation. Your loan specialist will walk you through this step to ensure you know what is required.
- Get your cash. Your cash will be available shortly after your application is approved. You can choose to either pick it up in person or have it sent to you via check or wire transfer.
You’re just a few steps away from getting the money you need. Don’t wait any longer–start the title loan application process today.