Everything You Need to Know About Loans Against Your Car Title
If you’re considering taking out loan against your car title, you probably have quite a few questions regarding the entire process. It’s important to get the information you need to get the loan you want. It is equally important to know about the benefits and potential costs of taking out a loan against your car title. While it can help you get out of a financial slump or emergency, it can also become an emergency of its own if you do not treat with the responsibility and care that it requires.
Continue on to see some of the most frequently asked questions, and get the answers, regarding car title loans.
How long does it take?
If you’re in need of money fast, taking out a loan against your car title can be a great way option. Car title loans are all about fast cash, and many companies can get you approved, and get you your cash in hand within hours.
Typically, if you are taking out a car title loan, you can expect to have your money within 24 hours of applying. 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 all that, lenders are typically motivated to get deals done as soon as possible.
How much money can I expect to get?
The amount of money you can expect to get out of your loan is dependent on the value of your car and the amount of equity you have in 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 your car. The amount of your loan will typically equal between 25 percent and 50 percent of your car’s total value.After the value of your car is equated, your car title loan will most likely equal anywhere between $100 and approximately $5,000. Some companies have a minimum (usually between $1,500 and $2,500), and other companies have a maximum which typically tops out at $50,000 across the entire industry.
Can I still use my car?
This is one of the best aspects of a car title loan. You can use your car as long as you are making your payments to pay back your loan. During the life of your loan, you will be able to continue using your car with no restrictions. 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.
What documents will I need to apply?
The answer to this depends on what lender you end up borrowing from. Typically, however, these are the documents you can expect to be asked to provide.
- A Government Issued ID
- A Proof of Income (unless applying without a job)
- A Proof of Insurance
- Proof of Residency
- Vehicle Registration
You will also either be asked offer pictures of your vehicle, or bring your vehicle for an in-person inspection. Some companies may also ask for professional and/or personal references.
Does my car have to hold a specific value?
Vehicles usually have to be at least $2,000 to qualify as collateral for a car title loan. Some companies need your car to qualify for a year or mileage requirement as well.
Can my car title loan impact my credit?
Simply taking out a car title loan will have no negative impact on your credit. What very likely will have an impact on your credit would be a missed payment on your loan repayment.
If you do miss any payments, your credit score will most likely decrease just like it would if you missed any other kind of credit or loan payment.
On the adverse side, responsibly paying back your car title loan could have a positive impact on your credit. If you have poor borrowing history, or very little credit history, a car title loan could be a good way to prove to future lender that you are a responsible borrower. If you want your car title loan to help improve your credit, make sure that the lender you are working with reports to the major credit bureaus.
What if I have bad credit?
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. It is important to remember that most car title loans are predominately based off the value of your car.
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.
What if I don’t have proof of income?
The answer to this depends on the what lender you are looking to work with. If you are looking to take a loan against your car title, some lenders require for you to make a minimum amount per month to apply. Others accept applications with no proof of income. Some companies also accept other documents in place of proof of income. Documents such as disability, pensions, a retirement account, social security, or unemployment benefits can also be used.
How long is the repayment period?
The repayment period ranges in length depending on which lender you decide to borrow from. Some periods are as short as 15 days. The average repayment period is a month. Some repayment periods can last as long 12 months or even more.
It is important to find out whether or not the company you are working to borrow from has pre-payment fees. That means that if you are able to pay your loan back before the end of the payment period, you could be charged for it. All types of vehicles are eligible to be used as collateral for a title loan, including older vehicles and classic cars. True Financial is also able to help you with title loan refinances.