If you are considering a way to borrow money using your vehicle then a title loan is one way to do so. A common question when looking into a title loan is are they hard to get?
Title loans are comparatively easy to get, assuming you meet certain requirements.
In fact, they are one of the easiest loans to both qualify for and get funded. This, however, does not mean they are a good idea for everyone, despite what some lenders may want you to believe.
If you are considering a title loan we highly recommend looking into at least two items before moving forward:
- Making sure you are a good title loan candidate – this includes ensuring the loan will solve a short term financial problem.
- Preparing for the loan – this includes ensuring the loan is affordable and getting your information ready to apply should you choose a title loan.
Often lenders overlook these two highly important (in our opinion) items. Those of you who have read some of our posts know we emphasize both preparation and making sure a title loan is the right choice for your specific situation.
Easy Loans don’t Always mean Good Choices
Just because a car title loan may be easy to get does not mean it will make a good choice for your specific financial situation. You need to make that determination based an analyzing the situation and alternatives.
Unfortunately, not all lenders will not take the time and effort to communicate what situations may or may not be best served by a title loan.
For example, title loans are meant to be short term loans and to serve as solutions to short term financial problems. However, some lenders are now making longer term title loans with repayment terms in years instead of months.
Extending a title loan for a longer term can make the total cost very high. See what happens when you make a title loan a longer term loan.
Additionally, just because you are approved for a certain amount doesn’t mean you should borrow that amount. While it may be tempting, make sure to plan out the repayment schedule. Which takes us to our next point:
Avoid ‘Borrowing the Max’
When you apply for a title loan, or even look to apply for a title loan, you will likely find sites with forms on every single page trying to get you to apply. Many times these will include terms like ‘we will get you the max’.
Do your research and find a lender that focuses on more than convincing as many people as possible to borrow the max. A commitment to customer service, even when that means advising against a title loan, should be the goal.
Financial Solutions, not Problems
A title loan should be a solution to a short term financial need (see the FTC’s take on this). Too often they become longer term financial problems in themselves.
This usually happens when borrowers rush into the loan without preparation. It is understandable that with a pressing financial problem to attend to most people don’t have time to fins the best loan.
Don’t be one of those borrowers. Prepare for your loan, find the best lender, and borrow only what you need to solve your short term problem.
If you happen to already be stuck in a very high interest loan then a title loan refinance may be able to help. It may be possible to reduce your payment and get a better deal. This could save you a significant amount of money.
General Title Loan Requirements
All loans have requirements, title loans are no different. Assuming you can meet the requirements your likelihood of being able to get a title loan is high.
These requirements include:
- Vehicle with equity
- Lien free title
- Drivers License
- Ability to repay the loan
While some lenders do have other requirements, these are the main ones. The real question you should be asking instead of “Is a title loan hard to get?” is “Will a title loan improve my situation?”.
Title loans are not hard to get, however this does not mean they are the right choice for everyone that qualifies. A title loan needs to be a solution to a financial problem.
Too often title loans turn into financial problems themselves, completely defeating the purpose of getting a title loan in the first place. Properly preparing helps ensure you make a title loan a solution and avoid a potential problem.
Online Title Loan Requirements
Online title loans have become more available to consumers in states that permit title loans. So, are online title loans hard to get? What additional requirements do online title loans have?
The answer depends on what type of online title loan; for purposes of explaining concisely we’ll assume it is a completely online title loan with no inspection. This means it is an online title loan without showing the vehicle.
In this case the main additional requirements are vehicle pictures. Since the lenders won’t see the vehicle in-person, providing pictures allows them to perform what we call a virtual appraisal.
What About Credit Scores?
What type of credit score is required for a title loan? The reality is the credit score is not important since the loan is secured by the vehicle. The amount you can borrow is determined by vehicle value, not credit score. This makes getting a bad credit title loan online a fairly easy task.
Lenders that check credit primarily do so to verify personal information and assess outstanding debt. This is to help ensure the loan is affordable.
This is another reason why title loans are not difficult to get. Again, this does not make them the right choice. Remember, as a secured loan, a default can result in vehicle repossession.
Can I get a Title Loan with no Job?
A job is not always a hard and fast requirement to get a title loan. The ability to repay the loan, is however, a definite requirement. This ability to repay the loan can come from any oncome source, regardless of whether or not it is a regular job.
It is possible to get a title loan without income verification, as long you have the ability to repay the loan. In worst cases, the vehicle itself can be used as a source of funds to repay the loan.
Is it difficult to get a title loan? Generally no, it is fairly easy assuming you can met the title loan requirements. Just because a loan is easy to get does not mean it is the right choice for your situation.
Perform the necessary preparation steps and make sure you are a good candidate for a title loan before moving forward with one. This will increase the chances of making a sound decision, regardless of whether or not that decision is a title loan.