Financially tough times call for drastic measures and sometimes that can mean taking out a loan.
Going through a traditional personal loan lender can be tough, especially if you dong great credit, are under employed or simply are unemployed while looking for work. You can spend quite a bit of time applying and getting rejected by unsecured loan lenders.
Instead of jumping through the many hoops that most traditional lenders require of you, you could very easily opt for a car title loan instead.
Car title loans are a great option for people who need money fast, but don’t have good credit, solid employment, or even a bank account.
The reason why is because car title loans are actually secured loans that are tied to the value of your car.
Before we go into how you can secure a car title loan without a job, let’s break down how they work.
Basically, a car title loan is a secured loan that is based on the value of the car that you own in full. After you apply for a title loan (you can apply online, on the phone ,or in person), the lender will evaluate the value of your car and then offers you a loan based on it. Depending on the company that you apply for a loan with, they may ask for proof that you will be able to pay back the loan within the payment term, but overall car title loans are known for being incredibly flexible when it comes to credit score checks.
Once your vehicle’s value has been determined, the lender will offer you a loan in exchange for holding onto your car’s title. Typically, car title loans range in value between $100 and $5,500. They can go much higher, however. If your car is especially valuable, title loans are sometimes known to go as high as their legal limit – which in many states is $50,000.
During the loan, your lender will hold onto your car’s title until the loan is repaid. One of the primary selling points of car title loans is that you can still operate your car while the lender has your title. If you default on your payments, however, your lender will have the option to repossess your car.
Once you are approved for your loan, you will get the cash you were approved for quite fast, typically within 24 hours of approval., Make sure not to enjoy it for too long though because you’re going to have to start paying back your loan soon.
Car title loans are typically short-term loans (repayment periods can last just a month) with incredibly high interest rates (APR up to 300%). If you find yourself not being able to repay the loan within the specific repayment period, you will not only be subject to accruing added interest fees, you will also be at risk of losing your car.
Now that we have the basics of what a car title loan is, we can move on breaking down why they are a good option for you if you are unemployed.
If you own your car and have proof of ownership, you can use it to secure a car title loan. While some loans can take a long time to be approved, car title loans can often take as little as a few hours to be approved. Because the value of the loan you get is tied to your car, you are not required to have a cosigner or have your credit report checked out.
The real question is, how do you get a loan without a job?
The good news is that you can definitely get a car title loan even if you are unemployed. While some lenders do require proof of income, others only require that you own your car. All car title lenders will require proof that you do in fact own the car.
While proof of income is not required, you will have to be prepared to share some information in order to qualify for a loan. While there are very few requirements, it is best to make sure that you qualify and have the documents necessary to be approved.
- You must be at least 18 years old.
- You must be able to provide a copy of a valid government issued ID.
- There must be no liens on the vehicle, meaning a bank or auto loan institution does not own your car.
- You must own the vehicle outright.
- You must have the original title of the vehicle.
For most car title loans, repayment terms last just 30 days. You don’t need to prove that you have a job, but you will have to prove that you’ll have the money to pay back the loan. Luckily, a large variety of different sources of income can prove to be enough for you to secure a car title loan.
Here are the other forms of income you can use to secure a title loan without being employed:
- Under the table payments: For this, you are going to have to prove that you do get paid under the table. Many lenders will accept a letter from your employer as proof of under the table employment which includes your name, the date, the amount you are paid, the service you provide, a signature and a contact number.
- Social security benefits: To prove this, just share your pension plan statement. All you need to do is fax a copy or take a picture of your document and send it to your lender.
- Annuity: To prove that you have an annuity, just take a picture of your statement and send it to your lender.
- Worker’s compensation: To prove that you are getting money through this form of insurance, just show the necessary documents related to the amount of money you receive from worker’s comp.
- Settlement/court-ordered reward: If you received money during a court settlement, this will be enough for you to obtain most car title loans.
- Inheritance: If you are lucky enough to have an inheritance, you can use it to prove that you will be able to pay back your car title loan.
Sharing documents such as these may seem like a hassle, but really it is for your own benefit.
Even if you do have a car that can be used to get a car title loan, you need to make sure that you will actually be able to pay back your loan once you are approved. If you are unable to pay back your loan, not only will you most likely lose your car to repossession, you could also find yourself indebted to your lender if they cannot sell your car for the full amount of what you owe.