When you need money now, and you’re looking at title loan options, you might wonder if you can borrow enough to meet your needs. Unlike traditional loans, title loans use the value—or equity—in your car to back the loan. With a title loan, you can only borrow as much as your car is worth and your ability to repay. There also are borrowing limits that guide these loans. LoanCenter has maximum and minimum amounts you can secure through a title loan which can be as high as $50,000. LoanCenter’s minimum loan amount in certain states is $2,000. However, there are a range of loan amounts between the minimum and maximum.
Here is a table of minimum and maximum loan amounts that you could potentially borrow from LoanCenter. The information is organized by states.
How much can you borrow with online car title loans?
The answer–beyond the minimum and maximum guidelines–depends on a lot of factors. However, when considering online car title loans, you need to understand that the your ability to pay and the equity of your automobile are the critical factors that determines how much you can borrow. Your car is the collateral used to secure your loan. For lenders, your car provides security so that they can attempt to be made whole whether you pay it back or not.
Cars, Trucks, Vans & SUVs
Caclulating the value of your car isn’t as simple as throwing out a quick estimate. Determining the value of your car involves looking at many factors such as make/model, condition, mileage, age, and if your vehicle had been involved in any collisions. One resource that you can use to get an estimate on the price of your vehicle is Kelly Blue Book. Each of these areas affect the overall value of your vehicle and the amount of your loan..
Make and Model
Some cars are luxury automobiles that command a high value. BMW, Audi, Infiniti, Lexus, Cadillac, Acura, Range Rover, and other high-end manufacturers specialize in automobiles that boast pricier features and/or higher performance mechanics. Luxury automobiles may be priced in the six-figures when purchased new, but even older models may still hold a high value when compared to other automobiles.
If you own a newer luxury automobile that has reasonable mileage and is close to being paid off (or is already paid off), then the amount you can borrow might be in the five-figures. While even older luxury models with high mileage still hold value, older vehicles will probably be used as security on smaller loan amounts. Each manufacturer also features different models that range in price and upgrades.
Keeping your car in good condition helps maintain its value. If you don’t regularly change your oil, rotate tires or take your car in for regular tune-ups and repairs, your car’s mechanical condition may suffer greatly. And if the mechanics start to fail, your car’s value is going to plummet. Basic and essential repairs can be expensive, but major repairs can be financially devastating. That’s why routine maintenance is so important.
Scratches, dents, dings and even stained interior all impact a vehicle’s value. While a dented bumper, paint scratches or a messy interior might seem like small imperfections, these little details make up the vehicle’s big picture. Even minor flaws can lower the value of a vehicle, and they may also indicate poor overall maintenance and ownership.
Check your odometer, because it will impact the value of your car. Higher mileage is an indicator of wear and tear on your vehicle.. If you’re shopping for used cars, you’ll notice that higher mileage vehicles are priced lower. When a car reaches 120,000, owners also may have to invest in more frequent tune-ups to keep their automobile in tip-top shape.
So even if your vehicle is newer, high mileage will affect the vehicle’s value bottom line. While the appearance and age may be impeccable, an odometer reading 175,000 may signal dropping dollars—for both your car and your car title loan. While regular services will keep a car in good shape, you can’t change the numbers on the odometer. And those digits may greatly impact your financial bottom line.
Youth is the most unfaithful mistress! This adage holds true for cars, as well! Every year, manufacturers release new models with updated features and sleeker designs. Each new year means that last year’s models are not as desirable and hold less resale value. According to Carfax, “on average, a new car will lose 60 percent of its total value over the first five years of its life.”
However, age is only a part of the financial equation, because an older car in great condition and with low mileage may still be worth as much (or perhaps even more) than a newer car with high mileage and damage. So, while age does affect the value, mileage and condition also can help balance and boost the value of older cars.
Some model years also may be more prone to mechanical defects, recalls or other issues that affect the value. If your car is appraising for less than you had hoped, inquire with your lender about the appraisal; there may be more issues with the vehicle than you realized.
Your car’s title designation affects both the value of the car and approval for a title loan. If your car has a salvage title, the designation greatly impacts the value. In some cases repairs can be made so that the vehicle passes state inspections and is safe to drive (then the car receives a “branded title”). But some salvage vehicles may NEVER be safe to drive. And a salvage title, usually means low value. Your vehicle may command only a few hundred dollars or may be just a bit more, but lenders will not want to take a risk on these vehicles. The value of a salvage vehicle is difficult to determine the bottom line: salvage titles cannot be used to back a title loan.
So what about titles that are ‘clean’ (e.g. not salvage) but still have a lien holder—like the original lender? Can these cars still be considered for a title loan? Yes, and no. If you are still paying off your original car loan, you may qualify for a title loan if there is equity in the vehicle. Ideally, you should have paid most of your loan principal. The equity of your vehicle is the difference between the value of your vehicle, and the amount the balance left on the loan. The higher the equity, the more money you can borrow using a title loan.
What about other vehicles like RVs and motorcycles?
Not everyone uses a standard car, truck, van or SUV for their title loan. If you own a recreational vehicle (RV) or a motorcycle, you may be able to use these vehicles to get a title loan. However, both RVs and motorcycles have borrowing thresholds for title loans. Loan amounts for these vehicles are capped at around $4,000 from LoanCenter.
How much you can borrow for online car title loans depends heavily on two factors: the equity of your vehicle and your ability to repay. And there are many issues that can impact what your car is worth. Age, mileage, condition, make/model all help determine the resale value of your automobile. With a title loan, you cannot borrow more than your car is worth, because the vehicle itself is the collateral for the loan. Understand that your vehicle’s value decreases once you drive off the lot, and any outstanding loan you have against that vehicle also lowers the equity on your vehicle. If your vehicle holds a salvage title, you also will not qualify for a title loan—as these titles are deemed too risky to use. RVs and motorcycles also hold less resale potential, and many lenders also cap the borrowing amounts for these vehicles.