How Do Auto Title Loans Work?
No matter how carefully you stick to your budget, unexpected expenses can throw a wrench into your financial plans. From car repairs and leaky roofs to medical bills and last-minute travel plans, unexpected expenses can add up quickly. If you need help coming up with the cash you need, you may want to consider applying for an auto title loan.
What Are Auto Title Loans?
An auto title loan, also referred to as a car title loan or title loan, is a type of secured loan that a borrower can obtain by putting up the title to their vehicle as collateral. You can use the title to a car, RV, or motorcycle to obtain an auto title loan.
Taking out an auto title loan does not mean you are giving your vehicle to a lender. In fact, the lender will not take ownership of the vehicle while you make payments on your debt. You remain as the registered owner and can continue to use the car as you normally would.
What Do You Need for An Auto Title Loan?
You must own the car, RV, or motorcycle that is being used as collateral, be at least 18 years old, have value in your vehicle, and show your ability to repay the loan to obtain an auto title loan. You will also need to submit certain documents to the lender, including:
- Â Â A clear title to your vehicle with your name on it
-   Your driver’s license
- Â Â Tax returns, paystubs, or other documents that show your income
Some lenders may require additional documentation. But don’t worry—when applying with LoanCenter a loan officer will explain what you need to submit to complete your application.
Will They Check My Credit When Applying for An Auto Title Loan?
Many people worry that they won’t get approved for an auto title loan because of their poor credit. Bad credit may make you ineligible for other types of personal loans, but that is not necessarily the case for auto title loans, given that credit isn’t the only deciding factor.
Traditional lenders analyze credit scores to determine risk. In other words, they look at your credit history to see how likely it is that you will repay your debt in full.
But an auto title loan is secured by collateral, which is the title to your vehicle. Because it is a secured loan, auto title lenders don’t solely rely on your credit history when determining your eligibility for a loan.
How Much Can I Get for An Auto Title Loan?
If you’re in need of cash, you may want to know how much you will be able to get by taking out an auto title loan. The amount you are approved for will depend on several factors, including:
-   Your Car’s Value
- Â Â State Laws
- Â Â Your Income
- Â Â Type of Vehicle
Your Car’s Value
The value of your vehicle will impact the amount of your auto title loan. The lender will need to calculate the value of your vehicle and depending on the lender, may need to inspect it as well. The lender will take many factors into consideration during the valuation process, including the make, model, mileage, condition, and age of your vehicle.
You cannot borrow more than your car is worth, so determining the value of your vehicle is an important step in the process of applying for an auto title loan.
State Laws
Auto title loan laws vary from state-to-state. Several states have established certain minimums and maximums with which lenders must comply when issuing auto title loans. If you live in a state with these laws, this could affect how much you are able to get with a car title loan.
For example, the state of California has established a $2,510 minimum for auto title loans, whereas the state of Georgia has established a $3,010 minimum.
Your Income
The lender will also consider your monthly income when calculating how much to let you borrow. Lenders look at your monthly income to determine the size of payments you can afford to make on a regular basis. This is how the lender makes sure that you are not approved for a loan that you cannot afford to repay.
It’s important to note that you don’t need to be employed to get approved for a title loan. You can get approved for a title loan with other sources of income such as workers’ compensation benefits, retirement benefits, disability benefits, and more.
Type of Vehicle
You can obtain a title loan using the title to your car, RV, or motorcycle. Choose the title you want to use as collateral carefully because it can impact how much you are able to borrow.
Can I Get A Title Loan Without Showing the Car?
Your lender must know how much your car is worth before deciding whether to approve you for a car title loan. Part of the valuation process is an inspection of your vehicle.
Therefore, part of the valuation process typically includes an inspection of your vehicle.
What Happens If I Can’t Pay My Title Loan?
You must make consistent, on-time payments to repay your auto title loan. If you stop making payments on your auto title loan, the lender has the right to take ownership of your vehicle to repay your debt.
Can I Apply for A Title Loan Online?
Every lender is different, but here at LoanCenter, you can fill out an application for a title loan on the LoanCenter website. A loan officer can walk you through the entire process to ensure you submit all the required documentation.
After submitting the application, simply wait to find out whether you are approved so you can get the cash you need. That’s all it takes to obtain an auto title loan through LoanCenter!1
1This is not a guaranteed offer of credit. Loan approval is subject to meeting lender’s credit criteria, which include demonstration of your ability to repay the loan, providing collateral of acceptable value and equity, and the grant of a first priority lien on your motor vehicle. Due to the Military Lending Act, installment loans secured by the borrower’s motor vehicle are not offered to military members or its dependents.
