Common Questions Asked When Applying for Title Loans
If you are in need of some emergency cash or are looking for the last few thousand dollars to complete a large and important purchase, chances are good that you are looking to take out a personal loan of some kind. One potential road block you could face when searching for the right kind of loan for you, is your credit score. If you don’t have a don’t have a strong credit score, many types of unsecure personal loans may be out of reach.
Because of that, you may turn to the option of seeking out car title lenders. If car title loans are legal in your state, they can be a great way to get the money you need very quickly. Depending on what you’ve heard about car title loans, you might be somewhat reluctant to take the chance. It’s true, they do come with some very real risks, but there are many benefits to title loans - they are fast, easy and can often be applied for online.
Before we go over how to find the best title lending companies, we should quickly break down exactly what a car title loan is. A car title loan is a secured loan in which the value of your loan is based directly off of the value of your car and the equity you have in it. After a car title company evaluates your car and the necessary documents such as proof of income, proof of residence, and a government issued I.D., you will be offered a loan. If you should choose to take it, you will typically have your cash in hand within a matter of hours.
Once you get your cash, car title loans can have payment terms as short as just 30-days. Also, title loans usually come with very high interest rates, with annual percentage rates going as high as 300 percent. On top of that, it is always important to keep in mind that if you default, your lender will have the right to repossess your car as collateral.
With all that potential risk involved in taking out a loan against the value of your car, you’re going to want to make sure that you borrow from one of the best online lending companies available to you. Here are a few things to looks out for when you are shopping for a car title loan company to know that you are borrowing from a trusted, experienced, and fair lender.
What happens to my car with a title loan?
Can I keep driving my car?
Yes you can keep your car, keep enjoying it and keep driving it!
Is a car title loan different to a title pawn
Yes its a different product entirely however some lenders provide both. See more here.
What is the interest rate for a title loan?
Does your potential lender offer reasonable interest rates?
Interest rates are crucial to pay attention to and one of the most important things to look for when comparing title loan companies. Interest will have a huge impact on the overall price of your loan greatly because they reflect the percentage of your loan that you have to pay on top of the cost of the loan itself while you pay off your entire loan. The percentage can vary widely depending on what title loan company you are working with. Title loan regulations vary by state to state for instance a car title loan in California will have different rules to a car title loan in Ohio as each is administered by the respective states.
The average interest rate attached to a car title loan across the industry is around 25%, but you can find companies that offer much more reasonable rates. Still, even if you do find a lender with low rates, you will want to keep the rest of the tips discussed in mind to avoid any problems down the road.
Knowing what your interest rate is in a loan will give you the insight you need into whether or not you will be able to pay back the loan within the payment term. It will also let you estimate how long it will take you to pay back your loan, and how much interest you will accrue over that time.
Does your potential lender have years of professional experience?
This is one of the first things you’re going to want to check when applying for a car title loan. As a customer who may have no experience or knowledge when it comes to taking out this type of loan, it’s important to work with professionals who understand the business.
One of the best ways to make sure that they know the ins and outs of the business, is to find out how long they’ve been in business for. Loans, interest rates, and payments can often be somewhat difficult to manage and it is important to find car title lenders who have years of experience working with you on the other end.
What fees need to be paid when taking out a title loan?
When it comes to title loans, it is important to make sure to read the fine print before you sign. Though many car title loan companies charge some kinds of fees upfront, many lenders also charge additional hidden fees that can really add up during the life of your loan.
When comparing companies, make sure to a get a quote from each car title lender before you eventually decide which car title loan company is the best for you. If you come across a title loan company that is wholly unwilling to give you a quote or reluctant to divulge what hidden fees you might encounter, you would be wise to avoid.
Online versus physical title loan lenders
Usually, people who are considering taking out a car title loan are doing so because they are facing a financial emergency and – due to a number of circumstances – have decided that taking out a car title loan is the best option for them.
That does not mean that taking out a car title loan alleviates all the pressure and stress that comes with that emergency. In fact, title loans – as with all loans - certainly come with their very own stresses and difficulties. Because of that, it is important to find title lending companies that are reasonable and flexible. It’s easy to work together when you’re trying to take out a loan, it’s much harder to feel like a team when you are working hard to pay it back.
The best online lending companies will be willing to make your loan work for you. Sometimes that may even require you to extend your payment period and accrue additional interest. If you ask a potential lender if they would be willing to work with you in that kind is situation and their answer is a flat no, you may want to consider looking elsewhere.
What are ways to research or get reviews of a title loan company
Another way to make sure you are dealing with a reputable car title lender is to check out the company testimonials from previous clients and customers.
If you do just a bit of online digging, it should be quite easy to find testimonials. The most reputable companies will often offer customer testimonials on their own sites. If they don’t advertise testimonials on their own sites, you can usually find them on company review sites. Beyond that, if you find yourself having trouble finding any kind of testimonials about a given company, it is probably best to stay away.
What types of autos can you get a title loan on?
Title loans are available on a range of vehicles including cars and trucks and SUVs. Older and high milage vehicles also qualify for a title loans, see more here Title loans for high mileage vehicles
How long does it take to get a title loan online?
If you’re in need of money quick, a car title loan can be a great option to consider. Especially if you are not lucky enough to have the kind of credit score necessary to qualify for a personal unsecured loan. Car title loans are all about fast cash, and many companies can get you approved, and get your loan to you within hours.
Usually, people taking out a car title loan can expect to have their money within 24 hours of applying for the loan. The timeline certainly does depend on the borrower, as lenders can only approve the documents you submit as quickly as you submit them, but once you do that, companies are typically motivated to get deals done, and get your cash in hand, as soon as possible.
How much money will I receive if I get a title loan online?
The amount of money you can expect to get out of your loan is entirely dependent on the value of your car. The more it’s worth, the more you can borrow.
It is also important to note that many car title lenders will only work with you if you have full ownership of – or equity in - your car. Your title must be lien-free and you will have a harder time getting a car title loan online if you still owe money on your initial car loan.
The average value of a title loan is anywhere between $100 and approximately $5,000. Some companies have a minimum amount(usually between $1,500 and $2,500), and other companies have a maximum. That maximum typically tops out at $50,000 across the entire industry. Though, be aware that it is very rare for a car title loan to be worth anywhere near that.
While your loan amount is based off the value of your car, do not expect to get a loan worth the total amount of your car. You will typically be able to borrow between 25 percent and 50 percent of your car’s total value. You’ll know how much you are eligible to borrow before you finalize your application.
Does my car have to have a minimum value?
To put it simply, yes it does. Vehicles typically have to be at least $2,000 to qualify as collateral in order to qualify and in turn get a car title loan online. On top of that, some companies require your car to be beneath a year or mileage threshold as well.
What documents do I need to apply?
This depends on what company you are borrowing with. Sometimes you don’t even need a bank account to be approved for a loan, but overall these are the documents you can be expected to present.
- A Government Issued ID
- A Proof of Income
- A Proof of Insurance
- Proof of Residency
- Vehicle Registration and title even if its not clear
If you are looking to get a title loan online, you will also be asked to provide pictures of your car so that your online title lending company can evaluate its worth.
What if I don’t have proof of income?
This depends on the company that you are lending to. Some companies require for you to make a minimum amount per month to apply, while others accept applications with no proof of income.
If you are not working but have a different form of income, most online title loan companies will accept other documents in its place. Documents such as disability, pensions, a retirement account, social security, or unemployment benefits can also be used.
Will I still be able to use my car?
This is one of the best aspects of a car title loan and what makes it an attractive option to millions of Americans.
You can use your car as long as you are making your payments to pay back your loan. You can continue using your car with no restrictions while you are repaying your loan. That will only change if you fail to pay back your loan, in which case your lender will have the option of repossessing your car to sell and make up what you owe.
How does my credit impact my ability to get a car title loan online?
Whether or not you are subject to a credit score check before you are approved for a loan depends on the company you are attempting to borrow from. Some lenders require no check. Other’s make a credit card check a necessary aspect of granting a loan. But certainly you can apply online from the comfort of your home. Find out more here.
Primarily, however, it is important to remember that the value and your ability to take out a car title loan is primarily based on the value of your vehicle.
What a credit score check is typically for is so that lenders can try to predict whether or not you will be able to pay back your loan. Bad credit is not necessarily a deal breaker, but good credit could give you the opportunity to enjoy better loans and better repayment options.
Will a car title loan affect my credit score?
This is another great aspect of getting a car title loan online. If you want your car title loan to help improve your credit score, simply make sure that the lending company you plan on borrowing from reports to the major credit report bureaus. If they do report to those bureaus, your ability to borrow a car title loan and pay it back within your payment term will have a seriously positive impact on improving your credit score.
That will make it easier for you to borrow and open lines of credit further down the road.
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