Have you thought about getting a title loan in the past, yet were unsure about how risky it may be? There are many people who often wonder how car title loans work, but they have heard so many negative things about them that they choose to stay away.
The truth is that car title loans are simple and easy, and they are not as risky as they may seem.
When you visit a reliable company that has built up a good reputation over the years within the community, you have better odds of having a good loan experience while your short-term financial needs are taken care of.
Here are some more details on how to get a loan with your car title.
Why Do People Get Title Loans?
There are many reasons why people get title loans. These quick and efficient loans can be very helpful when you need cash in a hurry.
Getting a loan from a bank can be just as useful, however, it takes a long time to get approved for a bank loan, and if you have less-than-perfect credit, then you may not get approved at all.
Car title loans do not require you to have good credit or even fair credit. In fact, your credit history isn’t a big factor when you apply. Which makes title loans an excellent choice for those who need extra money in an emergency.
Some of the most popular reasons why people choose to get a title loan include:
- Home repairs
- Pay overdue bills
- Pay your rent
- Plumbing issues
- In need of new appliances
- School clothing and supplies
- Books and supplies for college
- Repairs for another car
- Urgent medical care
- Take care of expenses while you are out of work temporarily
- Buy supplies for a new baby
- Shopping for holiday gifts
- Out of town trips to visit ailing family members
- Paying for a family vacation
- Home renovation
There are so many more reasons why people choose to get a title loan.
You may need to apply for a loan due to an emergency or unforeseen debt. Or you may want to take out this type of simple and easy loan for something enjoyable such as buying holiday gifts, shopping for new school clothes or going on a family vacation.
The reason you choose to take out a car title loan against your car is completely up to you.
How to Apply Online
Getting a car collateral loan is a very simple and fast process. All you need to do is apply online with our short application and we will contact you.
If you are wondering how to get a loan with your car title, it’s very easy to apply.
You need to be the owner of the car and have a title for it with no other liens on it.
Which means that you don’t have any other loans against that particular car title. You will need to provide the lender with your name, address and other contact details such as your phone number or email address. Then you will provide them with the year, make, and model of the car if you are applying online.
If you apply at a title loan location, the representative may request to look over the car to ensure that it is in good condition. That will help them determine how much your car is worth, and how much money you can borrow against your title.
You may be asked to provide the lender with a few references that they can use to confirm your identity and other information. You can use your friends, family members, co-workers, or anyone that you know as a reference.
Most lenders will provide you with your money the same day that you apply. There are no credit checks involved in the process, so even if you have bad credit, you can still get the funds that you need.
That’s all there is to the application process. No hassles or hoops to jump through, just provide a few details and you’ll be good to go.
Understanding Title Loans
Now that you know how simple it is to apply for a title loan, you need to understand how car title loans work. It is best to fully understand the terms of a title loan before you sign any paperwork.
While car title loans are not as bad as many people think, there are some terms that the borrower must go by to ensure that they get their title back. You will be able to keep your car throughout the loan process and drive it as usual without any restrictions.
The lender will explain all the terms and requirements to you before you sign the contract and hand over your title. Be sure to ask any and all questions that you may have about the loan process during this time.
The representatives are very knowledgeable when it comes to loan requirements and they will be happy to address any concerns that you have.
Failing to Pay Your Loan
If you fail to make a payment, you usually don’t have to worry about the company towing away your car right away. Sometimes you can call the lender and ask to pay later or refinance the loan.
Or there may be some terms in your contract that explain about late payments. It is always best to call the title loan company when you know that you will be late making a payment. That way, the lender can make a note of it on your file and you will not have to endure multiple calls from the company.
If you end up missing more than one payment and fail to get in contact with the title loan company, then it is likely that your car will be repossessed and towed.
However, in some states, the towing company must have a warrant and show it to you before they can touch your car. If you request to see the paperwork and they do not have it, they can’t tow your car until they return with the right documents.
As long as you make your payments on time, you shouldn’t have any problem paying off your loan and getting your title back. Many title loan companies will offer different payment options to make your loan easier to pay off.
You may choose to pay bi-weekly or monthly or expand the duration of your loan so that your monthly payments are less. You may also want to use a car title loan calculator that is available on some company websites to find out how much you must pay each month before you even apply for a loan.
Special Laws for Title Loans
Different states will have different title loan requirements. It is a good idea to learn about these requirements so that you will be aware of all there is to know about how to get a loan with your car title.
Lenders usually charge around 25 percent each month in finance charges. This translates to an APR of 300 percent. Some lenders may attempt to charge more than that, and that is the reason for these special laws. Laws and percentages differ by state.
There are some states that do not allow title loans or payday loans at all, however, some companies have found a way to get around that regulation. These laws are put into place to protect the customer and prevent the company from charging too much in interest.
There are some lenders that will install a GPS on your car so that they can track the vehicle if it needs to be repossessed. Some states will require a lender who has repossessed your car and sold it to pay you back the difference between the sale price and your loan amount.
While other states allow the lender to keep the full amount.
Remember: Your Car is Collateral
While the rules and regulations may seem strict, keep in mind that you are putting your car’s title up for collateral when you take out a car title loan. It is the same as pawning an item at a pawn shop.
If you fail to pay back the money you owe for a ring or collectible item at a pawn shop, the broker will keep your item and sell it. If you fail to pay back your car title loan, the lender will gain possession of your car.
That is why it is so important to learn as much as you can about title loans before you apply and choose a respectable company to borrow money from who will work with you to make the payback process as easy as possible.