Were you aware that a car title loan is one of the quickest ways to borrow money?
When people need cash, they often resort to payday loans from private lenders. While these can be effective when you need money, they often take a long time for borrowers to get funded.
The solution you need is a car title loan. We’ll go over how to get a car title loan so you can get funded as quickly as possible, you just need to know the car title loan requirements.
So what is a car title loan and how do they work? Read on to learn everything you need to know about car title loans!
What Is a Car Title Loan?
A car title loan is an alternative to the typical personal loans that banks offer. These loans allow people to borrow money by using their vehicles as collateral.
Car title loans are often geared towards those that have lower credit scores because of the hefty collateral required. If you had a good credit score, you wouldn’t have to get a car title loan because you could get a personal loan without any collateral.
The exact terms of a car title loan will vary depending on the lender. However, many lenders charge daily interest rates, which can make them quite expensive if you don’t pay them off immediately.
These loans are not meant for those that are looking to make large purchases. Instead, they’re great for last-minute emergencies that you can pay for within a short period.
How Do Car Title Loans Work
Understanding how car title loans work is simple. In exchange for a loan, you’ll provide the lender with your vehicle and title. Only after paying off the loan will you receive your vehicle back.
Car title loans are similar to payday loans in that they have shorter periods. Because of this, you can expect to borrow money for up to 30 days.
What makes these loans stand out from others is that they don’t require much work to acquire. Instead of going through a lengthy application process, you can spend 15 minutes filling out information about yourself. Car title loans usually don’t require credit checks, so you can expect your score to be unaffected.
Lenders have their own borrowing limits, but many allow people to borrow half the value of their vehicle. This ensures that the lender can get fully compensated if you fail to repay them.
You can essentially borrow more money if your car is valued more. However, you can’t have any outstanding loans on the vehicle to qualify for a car title loan.
When applying for a car title loan, you’ll find out what the terms are before agreeing to them. If you borrow a large amount, you may be able to get a longer repayment period.
Requirements for a Car Title Loan
Because getting a car title loan is a simple process, you won’t have to bring much with you to apply for one. If you’re submitting a car title loan application online, you’ll just need to upload your documents. Shortly after applying, you’ll be approved and will immediately see the funds in your account.
Here are the main requirements for a car title loan:
Proof of Ownership
Out of all the car title loan requirements, proof of ownership is the most important because it’ll ensure that the lender can actually sell your vehicle. Your car’s title will act as proof of ownership, so ensure that you have one before applying.
If you lost your title, you’ll need to visit your state’s DMV to replace it.
Proof of Income
Aside from having your car title, another major car title loan requirement is having a reasonable income. A car title loan lender will want to see that you have the means to pay back the loan, so you’ll need to bring proof of income in the form of bank statements.
Pay stubs and tax forms are also proof of income, so it’s best to bring those, as well. The more proof of income you have, the easier it’ll be to convince the lender that you’re eligible for a loan.
Valid Driver’s License
A valid driver’s license is also necessary for getting a car title loan because it shows the lender that you’re who you say you are. If you have government-issued identification, such as a passport or state ID, you can also use those.
Why You Should Get a Car Title Loan
Not everyone should get a car title loan, but they’re a great option for those that are strapped for cash. If you have something come up and are unable to pay the expenses, a car title loan is one of the only loans you can get ASAP.
Instead of getting locked into a long-term repayment with another type of loan, you can get a car title loan and send the money back within a few weeks.
You can also build a relationship with the lender to acquire better loans in the future. This will make it easier to borrow more money without having to provide more collateral. You can find a plethora of title loan providers that care about their customers, you’ll just need to spend time looking.
Now You Know How to Get a Car Title Loan
We encourage anyone that needs to get a loan to go with a car title loan before anything. After reading this article, you now know how to get a car title loan, so you shouldn’t have a problem finding a decent lender.
Just go over the requirements for a car title loan to ensure that the application process goes smoothly. Providing you have all the necessary documents, you can get funded within a day after filling out your car title loan application. Check out our other articles to learn more about a variety of topics!
