Car Title Loans are easier to qualify for than other loans and therefore the car title loan requirements are generally easier to meet that other types of loans.
Title loans can also be completed quickly, in as little as 30 minutes. For those looking for a fast way to use the equity in their vehicle a title loan may be a solution if you meet the requirements.
What Do I Need for a Car Title Loan?
If you are short on cash and need a short term loan, a car title loan may be an option worth looking into. Like all other loans, use a title loan only when absolutely needed. Depending on your circumstances, a title loan can be a convenient way to get the cash you need for an urgent expense.
First, What is a Car Title Loan? The simple answer is a Car Title Loan is an easy way to use the equity in your vehicle to get cash quickly for an unplanned or emergency expense.
Title Loans allow you to borrow money using the equity in your vehicle as collateral without the lengthy process associated with most other loans. For more information we published a detailed guide on how to get a title loan that covers every part of the title loan process as well as detailed requirements.
Title Loan are meant to be short term solutions to financial problems and need to be taken seriously. As long as you have a source of future funds to repay the loan, it may be a viable option for an urgent or unexpected expense.
You will need to meet some requirements, beginning with the most obvious, the vehicle. Our recent post provides extensive details on how title loans work. For now, we’ll stick to discussing title loan requirements.
How do I Qualify for a Car Title Loan?
To qualify for a title loan you will need to own your vehicle with no liens. This means you cannot have an existing loan on your vehicle. If you are still making payments, then you have a lien.
If you financed your car when you purchased it and recently paid it off, the lien should have been released. The title should say “No Liens” on it. Many states use electronic liens. If you are unsure about whether a recent lien was released, contact the lender and make sure.
You will also need a valid Drivers License. These are the two minimum requirements for any title loan, we will go over additional title loans requirements shortly but first let’s discuss the main title loan requirement, the vehicle.
What kind of Car do I need to get a Title Loan?
Title loans are secured by the vehicle. The type of car you have will be used to decide whether or not you can get a title loan. In addition, the car will also play a major role in the loan amount if you do qualify. While some lenders advertise loans on any vehicle, the amount you will be able to borrow is directly related to the vehicle value.
Typically, you can borrow up to 50% of the vehicle’s fair market value. Check Kelley Blue Book to find your car’s value, or find a recent personal property tax bill. The bill will give you a rough idea of the value of the vehicle; although he amount can be inaccurate.
The year, make, and model of your vehicle is a very important part of the process. Additionally, some lenders have year and mileage cutoffs. These can range from 10-20 years old with anywhere between 100,000 — 200,000 miles. Contact your lender to find out if they have any restrictions.
Do you have an older classic or antique car? Find out how to get a classic car title loan at the best rates.
Why do Title Lenders have vehicle restrictions?
The simple answer to why lenders have year and mileage restrictions is that the vehicle needs to have enough value to lend against. The older a vehicle is, and the more miles it has, the less it is worth. If a vehicle has a book value of less than a thousand dollars, than a single repair can cost more than the vehicle is worth. For the lender, this may be an unacceptable risk. Generally, lenders require a car worth at least a couple thousand dollars.
With an older, high mileage vehicle worth less than that, you may have a difficult time finding a lender that will make the loan. If you do, the interest rate may be very high. Fast Title Lenders does not charge very high rates, but we also do not lend on vehicles worth less than $5,000.00.
Can I get a Title Loan on a Classic Car?
Absolutely. Classic cars are prime candidates for title loans assuming they are in decent condition. Depending on the year, make, and model, there may still be a significant amount of value in a classic car. Borrow what you need based on the car value.
Classic cars have increased in value significantly over the past 20 years. Even though a classic car may be older than the typical year cutoff, as long as it has value you can get a title loan using your classic car. Considering that most cars depreciate, a classic car that appreciates in value is a great candidate for a monthly term loan type classic car title loan.
Can I get a Title Loan with bad Credit?
Most title lenders do not check your credit. Because the loan is secured by the vehicle, having good credit is not necessary. You can have bad credit or no credit, it simply does not matter because it is not a factor in the loan decision. Additionally, since your credit is not checked, there is no hard inquiry on your credit report.
If you are in the process of rebuilding your credit this is important. Some of our customers have taken out title loans with us to pay off credit card debt prior to a large purchase. They were able to get a better interest rate on the large purchase, like a home or piece of property, as a result.
What is a Lien?
When you finance a car, home, or other personal property the lender usually records a lien in their name on the property’s title. In this case it is the vehicle title.
If you are currently making payments on your car, you probably still have a lien. If you recently paid of your vehicle, the lien was most likely released. Check with your lender to make sure.
Car Title Loan Benefits:
All loans, including title loans, have pros and cons. What are some of the benefits of getting a car title loan versus other sources of funding?
This is a great question and it is important to note that car title loans are not the right choice for every borrower. It is important to analyze all of your options and choose the one that best fits your needs.
When considering a car title loan, the following benefits accompany most title loans:
- Keep driving your car – A car title loan allows you to continue to own and drive your car.
- No credit check – Most lenders, including us, do not check credit.
- Same Day Funding – Title loans are very fast with funding the same day. In some cases, particularly with online title loans, funding may be the next day.
- Simple Process – compared to a loan through another financial institution the title loan process is fairly simple.
How much do Title Loans Cost?
Car Title Loans are generally more costly than other forms of financing. Unlike Payday loans, title loans have very different interest rates from lender to lender. Fast Title Lenders recognized that most large lenders charge very high interest rates and we set out to provide a more reasonable alternative.
Additionally, we developed a car title loan calculator that allows you to enter your loan term and amount, and calculates your monthly payment and interest. Feel free to use it as many times as needed. Our cost transparency and low interest rates have helped make us the best place to get a title loan.
Other Car Title Loan Requirements:
In addition to the vehicle title and a valid drivers license, title loans may also require proof of insurance and proof of income. This is usually enough to get a title loan at most lenders.
Although, we do need to mention that for certain lenders and online title loans, there are some additional requirements. These can include a spare key, employment information, and several references.
To summarize, title loan requirements can be broken into three categories:
Must Have Requirements: A vehicle with equity, Lien free Title, and Drivers License
Additional Requirements: Proof of Insurance, Proof of Income
Online Title Loan Requirements: A spare key, Proof of Address, Personal references.
Applying for a Title Loan
If you decide a Title Loan is right for you the next step is to apply for one. To apply for a title loan you can visit us or choose another lender. Most applications are pretty simple and require some information related to you and the vehicle you would like to borrow against. To help ensure the process goes as fast as possible with no delays, make sure you have the information to meet the title loans requirements.