A car title loan can be easy to apply for and the entire process can be done from the comfort of your own home with minimal documents. Simply because everything can be done online doesn’t mean there are no requirements to get approved. As this is a secured type of loan you’ll need to show proof of various items including a vehicle that’s owned free and clear and the ability to pay back the full amount. On the flip side, the car’s collateral is securing the loan and most lenders aren’t going to have strict requirements when it comes to your credit history.
What You Need to Know About Title Loan Requirements
Car title loans will always require some type of security, often in the form of your vehicle’s title. Meaning a vehicle’s pink slip is the main requirement for the loan. In simple terms, a finance company will confiscate the vehicle if payments are not made. Here is what you need to know about getting a title loan and what is required when you apply with Car Title Loan Lenders USA.
- Secured Value: Car title loans are generally limited to 35% to 65% of the car’s cash value. The exact amount is determined when your title loan company inspects your vehicle.
- Length of Loan: Financing for a typical title loan can range anywhere from 1 to 5 years. The payoff time depends on multiple factors including the term you agree to with the lender and the state regulations that you need to follow. We often see renewal and early payoff provisions included with each lending contract, so it’s important to ask questions about these terms before you sign a contract.
- Interest Rate: Besides knowing the main title loan requirements, you also want to APR or finance charge that comes with your loan. Our company features a great comparison tool that shows interest rates and lending terms for most of the largest title loan companies. Short term credit is always more expensive in an emergency financial situation when there’s sometimes nowhere else to turn. Online Title loans can be expensive even in states where the interest rate is capped. Feel free to view the Government’s site about the various financing choices that are made when it comes to lending. Where there are no limits, interest rates are usually set at 30% or higher a month. So if someone borrows $1,000, you will have to pay $1,300 thirty days later, plus fees.
- Charges and Fees: On top of the interest rates, there are various fees that are often associated with title loans. Many lenders charge a $25 to $30 fee, plus processing fees, document fees, origination fees, key fees, and more. These can sometimes add 20% to 25% to the cost of a loan.
What Documents Do I Need To Qualify For A Car Title Loan?
Since most title loans are secured, there are few documents required other than your vehicle title and personal identification. In fact, many companies don’t even check a borrower’s credit history or credit score at the time of approval.
Some companies don’t even need proof of employment and checking information or bank account history. This further suggests that these loans are pretty easy to get approved for if you have the required documents. Still, there are some requirements associated with getting approved for online title loans.
You don’t have to worry about your credit or other financial factors when you’re trying to get qualified. Even employment or job history won’t matter in many cases. Pink slip lenders still want to see some proof that you will be able to repay the equity loan. They also want to be sure that they can retrieve the car without too much difficulty if you default. To protect themselves, most lenders will need you to provide some form of the following:
- Car Title: This often takes the form of the original pink slip and is the main requirement from most title loan companies. This means the car has to be completely paid off with no extra liens or holds on the title. Furthermore, there often can only be one owner listed on the pink slip or vehicle registration. In all cases that is the person who is granted the loan.
- Registration: An unexpired registration in the same name as the one on the pink slip.
- Proof of Insurance: Primary insured must be the same name as title and registration.
- Government Issued ID: An official ID is always required for a title loan. It should be the same name as on the title.
- Proof of Residency: A utility bill or other evidence of residency by the same name as on the pink slip.
- Keys: A working set of all keys to the vehicle, if it needs to be repossessed.
- Valid References: Usually names, addresses, and phone numbers of at least 2 people.
- Proof of Ability to Repay Loan: Payslips, references from financial institutions, banks, etc.
You should make sure to have all these documents available before beginning your application process. There are a couple of other things you need to keep in mind, as well. The lender or bank will want to verify the vehicle’s condition before transferring funds. They may also need you to attach a GPS unit to your automobile so that they can track it in the event of default. But here’s the kicker, some of those models can be used to disable your car remotely! There are so many different ways it can go when using vehicle equity for title loans online. That’s why you need to know exactly how a car title loan works and best understand what it takes to get approved!
What Other Documents Are Required For Car Title Loans
Car title loans should only be used for the shortest amount of time possible. The current title loan requirements are minimal and it can be easy to borrow more money than you actually need. Treat this form of borrowing much the same as you would a payday loan or cash advance even if you’re only interested in a low interest title loan. We know the rates are generally going to be high and you want to pay off the full amount in the quickest amount of time. Title loan requirements will vary and you should have a realistic expectation of paying the full amount you took out. It’s also important to avoid a situation where you take out a loan that has interest rates or loan payments you can’t afford. Many people in this scenario will turn to title loan relief services looking to get the rates lowered when all that could have been avoided in the first place.
Requirements When Renewing Or Getting New Title Loan Terms
Renewing a car title loan is like selling your car for a fraction of its value. Still, someone who owns their car outright and is facing a very temporary cash crunch can use these types of cash advances. No one will deny that online title loan applications make it fast and easy to get cash. This is always the case when compared to traditional bank loans and alternative financing methods! It goes without saying that anyone looking to get new title loan terms or interest rates should first check the requirements to qualify for these financing terms.