Many people across the country are struggling financially right now. If you’re worried about making ends meet, you may want to consider using the title to your vehicle as collateral to apply for a car title loan. What do you need for a title loan? Here’s what you need to know:
How Do You Qualify for A Title Loan?
There are certain requirements that must be met in order to qualify for a car title loan. These requirements include:
- You must have a clean car title (salvage titles are not eligible)
- You must consent to a credit check. You can still qualify if you have bad credit, but the lender may charge you higher interest rates
- You must own the vehicle. You can still qualify even if you only partially own the vehicle
- You must have equity in your vehicle
If you meet all of these conditions, you may qualify for a car title loan.
What Documents Do I Need to Submit to Apply for A Car Title Loan?
Lenders will need to review certain documents to determine whether or not you qualify for a title loan, and if so, the amount you are approved to borrow. During the application process, you may need to submit:
- Your driver’s license
- Car title
- Proof of income
Some lenders may require additional documentation, so make sure you know what you are supposed to submit before completing the application. Submitting everything at once can speed up the approval process.
What If I Can’t Find My Car Title?
You are required to submit your car title to the lender before the loan can be made. But if you can’t find your title, there’s no need to panic. Instead, simply contact your lender for help. A loan representative can walk you through the process of obtaining a new title from the Department of Motor Vehicles.
Do I Need Insurance for A Title Loan?
Some lenders require applicants to provide proof of auto insurance in order to qualify for a title loan, whereas others do not. The eligibility requirements vary from lender-to-lender, so it’s best to ask your lender whether or not you are required to have insurance to get approved for a car title loan.
How Much Can I Get for A Title Loan?
The loan amount you are approved for will vary depending on a number of factors, including the value of your vehicle. Your vehicle’s resale value must be higher than the amount of money you are borrowing.
Lenders will take a number of factors into consideration when determining the value of your car, including the vehicle’s:
- Overall condition
However, if your car is worth $20,000, this does not necessarily mean you will be able to take out a loan in any amount below $20,000. This is because lenders must comply with state laws that set minimum and maximum title loan amounts. These laws can affect how much you are able to borrow, regardless of the value of your vehicle.
What Happens If I Don’t Pay My Car Title Loan?
If you take out a car title loan, you are using the title to your vehicle as collateral to secure the loan. This doesn’t mean that the lender will take your car keys away until you have completely paid off the loan. You can continue to drive your vehicle while you make payments on your title loan.
However, the lender will be listed on the car’s title as a lienholder on the vehicle until the loan has been completely paid off. If you fail to make payments, the lender can, among many things, take ownership of the vehicle to sell in order to repay all or a portion of your loan, depending on the value at the time of the repossession.
If you make all required payments, the lender will be removed from the title as a lienholder and you will retain ownership of the vehicle.
Is It Hard to Get A Title Loan?
Taking out a car title loan is relatively easy. You can complete the entire application process online from the comfort of your home. After your application has been submitted, a loan representative will review it, perform a credit check, and determine whether or not you are approved.
If you provide all of the required documentation, you may even get approved for your car title loan on the same day you submit your application.
If you’re interested in obtaining a car title loan, talk to our loan specialists today!