If you’re struggling to make ends meet, the key to getting the cash you need might be using your vehicle as collateral to secure a title loan. Unlike traditional personal loans, title loans are processed quickly, so you can get the cash you need as soon as possible. Title loans are also easier to qualify for, so you may be eligible for one even if you aren’t eligible for a traditional personal loan.
You won’t lose access to your vehicle if you use it as collateral for a title loan. In fact, the title loan company will allow you to continue to drive it while you make payments on your loan.
If you’re thinking about applying for a title loan, you might be wondering whether you can use your vehicle as collateral if you’re still making payments on it. Can you get title loans for cars not paid off? Here’s what you should know:
Can You Use a Financed Car As Collateral for a Title Loan?
Your car does not necessarily need to be paid off to use it as collateral for a title loan. If you are still making payments on your vehicle, your eligibility for a title loan will depend on several factors, including your vehicle’s resale value and your equity.
You must have equity in your vehicle to qualify for a title loan. Furthermore, your car’s resale value must meet the title loan company’s minimum value requirement. This requirement varies from lender-to-lender, so it’s best to contact your title loan company to find out how much your vehicle must be worth to qualify for a title loan.
In general, though, many people who have a few payments left on their vehicle still qualify for a title loan.
How to Calculate Your Car’s Resale Value
Because your car is used as collateral to secure a title loan, the title loan company must know how much it is worth when determining your eligibility.
The title loan company will consider a number of factors when calculating your car’s resale value, including its make, model, year, mileage, condition, and trim level.
There are a number of free online tools you can use to get a better idea of how much your car is worth. One of these tools is Kelley Blue Book. There are several ways to use this tool. You can enter your vehicle’s VIN to automatically pull up its information and calculate its value. If you don’t have the VIN available, you will need to enter some basic information about your car, including its make, model, year, and mileage, to find out how much it is worth.
How to Calculate Your Equity in Your Vehicle
If you’re still making payments, it’s important to know how much equity you have in your vehicle. To calculate your equity, subtract the amount you still owe on your vehicle from your vehicle’s resale value.
For example, say your vehicle is worth $15,000 and you still owe $5,000 on it. This means you have $10,000 of equity in your vehicle ($15,000-$5,000=$10,000).
If you owe more on your vehicle than it is worth, you do not have equity. For example, if your vehicle is worth $10,000 but you owe $12,000 on it, you don’t have equity. This is often referred to as having negative equity or being underwater on your loan.
You must have equity in your vehicle to qualify for a title loan. The value of your equity can impact your eligibility in addition to how much you can borrow. Title loan companies will not allow you to borrow more than the value of your equity.
What Other Factors Will Impact Your Eligibility for a Title Loan?
Your vehicle’s value and your equity in your vehicle are two of the main factors that will impact your eligibility for a title loan. However, other factors could also affect your eligibility.
For example, you must have a reliable source of income to qualify for a title loan. You must also be willing to consent to a credit check. If you don’t meet these eligibility requirements, you may not qualify for a title loan.
Talk to your lender to learn more about their eligibility requirements and if you qualify for a title loan.
What Documents Will You Need to Submit to Apply for a Title Loan
If you are planning on applying for a title loan, be prepared to submit the following documents to your lender:
- Your driver’s license or another government-issued ID
- The title to your vehicle
- Proof of income such as recent pay stubs, tax returns, or bank statements
- Proof of residence such as your driver’s license, utility bills, or lease agreement
- Proof of auto insurance
Your title loan application cannot be processed until you submit these documents. The sooner you submit the required documentation, the sooner you can collect the cash you need to make ends meet.
Will You Need to Bring Your Vehicle in for an Inspection to Get a Title Loan?
Remember, the title loan company will need to calculate the value of your vehicle during the application process. This valuation process can vary depending on the title loan company.
Some title loan companies ask borrowers to bring their vehicle in for an inspection. However, others offer more convenient alternatives. For example, a title loan company may agree to send someone to your home or workplace to inspect your vehicle. This ensures you don’t have to travel to the title loan company’s office to complete the inspection, which makes the process more convenient.
There are also title loan companies that allow borrowers to submit pictures of their vehicle instead of getting it inspected.
Make sure you understand what your options are when it comes to getting your car valued during the title loan application process.
How to Find Out If You Qualify for a Title Loan With Your Financed Vehicle
Eligibility for a title loan is decided on a case-by-case basis. If you are still making payments on your vehicle, it only takes a few minutes to find out if you can use it as collateral for a title loan. Follow these steps to request a free title loan quote from LoanCenter:
- Contact our loan specialists. You can call 1-866-553-3840 to speak to a loan specialist directly. Or you can submit your information using the form on our website and wait for a loan specialist to get in touch with you.
- Answer a few questions. Your loan specialist will need some basic information about your vehicle in order to prepare your free quote. You may need to tell your loan specialist your vehicle’s make, model, year, mileage, and condition.
- Review your quote. Your loan specialist will prepare a free quote based on the information you provide. This quote will tell you if you are approved for a title loan, and if so, how much you can borrow and at what interest rate.
That’s all it takes to find out if you qualify for a title loan using your financed vehicle as collateral. If you’re satisfied with the terms of the quote, you simply need to sign and submit the required documentation to complete your application and collect your cash. Contact us today to get started.