How Do Automobile Title Loans Work?
There are many different types of loans. For example, there are student loans, which pay for tuition and other education expenses; mortgages, which help borrowers purchase real estate; and auto loans, which help borrowers purchase new or used vehicles. But if you need fast cash, these might not be the right loans for you. In situations like this, you may want to consider applying for an automobile title loan instead.
Automobile title loans, often referred to simply as “title loans,” are not like traditional personal loans. Title loans are secured loans, which means they are supported by collateral. You may find yourself asking certain questions. How do automobile title loans work? Do you qualify for this type of loan? Here’s what you need to know before submitting an application:
What Will Happen to Your Vehicle If You Take Out A Title Loan?
If you want to borrow money with a title loan, you must be willing to use the title to your vehicle as collateral. This may make you wonder what will happen to your vehicle if you choose to take out a title loan.
Fortunately, you won’t need to hand over your keys in order to borrow money with a title loan. You can keep driving your car as you normally would once you are approved and make your payments in accordance with your loan terms. However, the lender will either hold onto your title or put a lien on it until your loan has been paid off.
How Do You Qualify for Automobile Title Loans?
The eligibility requirements for title loans are not the same as the eligibility requirements for other types of personal loans. You may qualify for an automobile title loan if you meet the following conditions:
● You are at least 18 years old.
● You own or partially own a vehicle.
● You have equity in your vehicle.
● Your vehicle meets the title loan company’s minimum value requirement.
● You are willing to consent to a credit check.
● You have a reliable source of income.
Every title loan company is different, so your lender may have additional requirements that you must meet to qualify for a title loan. It’s best to contact your lender directly to find out if you are eligible.
What Will You Need to Apply for Title Loans?
If you’re planning on applying for a title loan, you may be wondering what documents you will need to submit during the application process. Submission guidelines can vary depending on the lender, but in general, you are typically required to provide:
● The title to your vehicle
● Your driver’s license or another form of government-issued ID
● Proof of income such as recent pay stubs, tax returns, or bank statements
● Proof of residence such as your driver’s license, lease agreement, mortgage statement, or utility bills
● Proof of auto insurance
Your title loan application cannot be processed until you submit all of the required documentation. In other words, the sooner you submit the required documents, the sooner you can get the cash you need.
Can You Get a Title Loan If You’re Unemployed?
Many people run into financial trouble when they unexpectedly lose their job. If you’re in this situation, you may wonder whether you will be able to qualify for a title loan even though you are unemployed.
You will need to show proof of a reliable source of income to qualify for a title loan. However, this does not mean you need to be employed to qualify. You can still qualify for a title loan if you are unemployed as long as you have another source of income. Some examples of other sources of reliable income may include rental income, alimony, veterans’ benefits, disability benefits, or retirement benefits.
If you can provide proof of any source of reliable income, you may qualify for a title loan regardless of your employment status.
How Much Can You Borrow With Automobile Title Loans?
Title loan companies can issue anywhere from $2,510 to $50,000 per title loan (the minimum and maximum can depend on the state laws where you live). The amount you are approved to borrow will depend on a number of factors, including:
● Your income: The title loan company will evaluate your current income to ensure they don’t lend you more than you can afford to repay.
● Your car’s resale value: Your car is used as collateral to secure your loan, so the title loan company needs to know how much it is worth. To calculate your car’s resale value, the title loan company will assess its make, model, year, mileage, condition, and trim level. You are typically allowed to borrow up to a percentage of your vehicle’s resale value.
● Your equity: If you are still making payments on your vehicle, the title loan company will also consider your equity when determining how much you can borrow. Your equity is the difference between your vehicle’s resale value and the amount you still owe on it. You cannot borrow more than the value of your equity.
If you want to know how much you will be able to borrow, contact your title loan company. You can request a free loan quote that will tell you how much you will be approved to borrow if you move forward with the application process.
What Are the Benefits of Automobile Title Loans?
Title loans offer borrowers many different benefits, including:
● Fast processing times. If you need fast cash, you may not be able to afford to wait to borrow money through a traditional personal loan. Fortunately, title loans are processed quickly, so you can get the cash you need as soon as possible.
● Easy application process. It’s not hard to apply for a title loan. In fact, you can complete the entire application process over the phone or online.
● No prepayment penalties. Title loans don’t include prepayment penalties. This means you won’t incur an additional fee if you choose to pay your title loan off earlier than expected.
● No spending restrictions. There are no rules or restrictions regarding how you spend the money you borrow. It’s your cash, so you can spend it your way.
● Most credit types accepted. Title loan companies accept most credit types, so you may qualify for a title loan even if you don’t qualify for a traditional personal loan as a result of your credit.
How to Apply for Automobile Title Loans
Now you should have the information you need to determine whether an automobile title loan is right for you. If you need fast cash, follow these steps to apply for an automobile title loan from LoanCenter:
- Contact our loan specialists. Start the application process by getting in touch with our loan specialists. You can reach our team by calling 1-877-624-7594 or submitting your information using the form on our website.
- Request a free loan quote. Your loan specialist can prepare a loan estimate that outlines important information, including how much you are approved to borrow and at what interest rate. To get this free loan quote, you just need to provide some basic information about your vehicle, including its make, model, year, and mileage.
- Sign and submit documentation. If you are happy with the terms of your estimate, you can complete your title loan application by signing and submitting the required documentation.
- Collect your cash. You will be able to get your cash shortly after your application is approved. You can either pick up your cash in person or have it sent to you via check or wire transfer–the choice is yours.
Don’t wait any longer to secure the cash you need to make ends meet. Start the title loan application process today.
