Fast title loans are a fairly easy way to get fast access to cash using your vehicle. When you have a financial emergency with no other readily available sources of funding, you may be able to use the equity in your vehicle. With a fast title loan, the equity in your vehicle is used as collateral for the loan. You make payments, typically monthly, until the loan is paid off.
One major benefit of a cat title loan is you continue to own and drive your vehicle during the loan term. This means you can get the fast access to cash needed to solve your immediate financial need and keep driving your car. These are also know as fast auto title loans, pink slip loans, and title pawns. They all function similarly with similar terms. This article briefly discusses what a Fast Title Loan is, how they work, how to get one, and some tips for finding a lender.
Fast Title Loans – How do they Work?
A fast title loan starts with a simple online application. The application includes very basic information for the lender to get an idea of what you, as the borrower, are looking for. Then, the lender performs an assessment of the value of your vehicle to determine the potential loan amount.
You can usually borrow up to 50% of the vehicle’s value, assuming you have the income to support the loan. This means if your vehicle is worth $10,000.00, you can usually borrow up to $5,000.00. This does not, however, mean you should borrow the maximum amount you are approved for. The process for a fast title loan starts with applying online and ends with getting your title back after making your final payment. The full title loan process includes several additional steps.
How do I get Approved for a Fast Title Loan?
Getting approved for a fast title loan is easy. You will need to meet the title loan requirements. Once met, your approval is based on the value of your vehicle and ability to repay the loan. The value of your vehicle is generally the trade in value, or, in other words, what you could sell the vehicle for today.
To get an idea of the value of your vehicle you can use one of several inline valuation tools. KBB has a fairly easy one that provides a range of values based on the condition of your vehicle. Make sure to perform an honest assessment of your vehicle’s condition (interior, exterior, and mechanical).
In addition to vehicle value, the other factor in determining the loan amount is your ability to repay the loan. You need to have income to support the loan payment. The income can be any form of income, as long as it is legitimate and verifiable. Income can be any form of regular payments you receive from a job, 1099 work, an annuity, commissions, or any other regular payments.
Fast Title Loans – Is there a Credit check?
Another benefit of a Fast Title Loan is there is no credit check. Your vehicle and ability to repay the loan is all you need to qualify. This also means the interest rate is the same regardless of your credit score, so no need to “qualify” for the best interest rate. No credit check is important to some people for different reasons. Some have been turned down for traditional loans because of a low credit score.
Others are in the process of rebuilding their credit and do not want another hard inquiry or loan on their credit. We have had customers use a Fast Title Loan to pay of credit cards prior to a large purchase like a home or piece of property. By paying of their credit card debt, they were able to get a more favorable interest rate on the large purchase, saving them a significant amount of money long term. Some others just prefer the privacy.
How long do Fast Title Loans take?
Fast title loans do not take long (hence the name). This is especially true if you have all of your information and paperwork ready before applying for a fast title loan. We discuss everything you need to prepare for a title loan in our article about how to get a title loan. Typically, the fast title loan process takes about 30 minutes.
Additionally, there are now “Instant” online title loans. The word “instant” is in quotations because there is no such thing as an “instant” online title loan, despite what some lenders advertise. A title loan is not funded until the lender receives the title. Generally, online title loans take longer to fund than an in person title loan. The fastest way to get a title loan funded is to visit the lender.
Fast Title Loans – How much do they Cost?
Fast Title Lenders was founded on the principles of honesty and transparency, something we found rare in the title loan industry. This is not to say there aren’t decent lenders, there are. There are also dishonest lenders who give the whole industry a bad name. We mention this because title loan costs vary widely from lender to lender, with some charging very high rates. It is not unusual for a 12 month $2,000.00 loan to cost well over $5,000.00 to repay.
Title loan interest rates are usually quoted in monthly terms. This is important to remember when comparing the cost of Fast Title Loans form one lender to another. To make an accurate comparison, you need to compare either monthly rate to monthly rate, or APR to APR. Another factor to consider when comparing Fast title loan costs is fees. Make sure to find out what fees, and how much, your lender charges.
What are the Risks and Disadvantages with a Fast Title Loan?
Title loans in general have several risks and drawbacks. Some can be minimized by choosing a decent lender. Others are inherent to the type of loan. Regardless, all title loan risks can be reduced by planning and choosing the best lender. The following are common risks associated with fast title loans:
- Excessive Fees – Title Loans can have excessive and unnecessary fees that can add up quickly. Choosing a lender who does not charge fees will mitigate this risk.
- Very high interest rates- Many lenders charge very high rates as we discussed in our title loan costs guide. Choosing a lender who does not charge very high rates eliminates this drawback.
- Vehicle Repossession – Any car loan, whether it is a title loan or a new car purchase, runs the risk of repossession. If you buy a new car and stop making payments, the car will be repossessed. Similarly, with a title loan, if you stop making payments your vehicle will be repossessed. You can minimize this risk by making sure you get a loan you can afford to repay. You also want to choose a lender that works with their customers and does not repossess the vehicle after one late payment.
- Difficult payment methods – Some lenders make it difficult, and even costly, to make you payments. This includes accepting only in person payments or Western Union payments with high fees. This is easily mitigated by choosing a lender that accepts a payment method that is convenient for you. If paying by Debit Card convenient for you, make sure they accept debit card payments.
- Title problems – Some title loan customers have reported problems getting their title back after their final payment. This can be a big inconvenience especially if you are trying to sell or trade in the car or get another title loan. Make sure to choose a lender with a history of being responsive to customers without having incidents of missing titles.
Fast Title Loans are a way for vehicle owners to use the equity in their vehicle to borrow money the same day. You can learn more about title loans from the Federal Trade Commission, an unbiased source. There are many title lenders and they are not all equal. The most important part of the title loan process is choosing your lender.