What is a Title Loan and How Does it Work?
So, you’re in a bit of bind and need cash right away. You’re considering a title loan, since, from what you’ve heard, all that basically requires is a vehicle and title. There is a bit more to it, which you’ll read about below. Before signing off on one, it’s important to know how a title loan works.
Explain Title Loans
These are short-term loans that are usually taken out for 30 days or less, although they are sometimes rolled over, and longer terms are sometimes available.
To get a loan, you’ll primarily need a vehicle in your name and its lien-free title. You must turn over that title to the title loan company, which will keep it until the loan’s repaid.
An industry selling point is that you may keep your vehicle during the repayment process – a stark departure from most pawn title loan requirements. Those shops usually want the car and keys.
Because these loans are secured, your chances of getting one are generally relatively high. Just make those payments, though, or risk seizure of your vehicle. Be certain before you sign off on one.
What About My Credit?
People with below average, or worse, credit, get approved for title loans all the time. In fact, that’s a chief advantage such loans have over bank loans, the processing of which might take too long anyway. While the lender might look at your credit, it will focus on your vehicle and income.
What Do I Need to Get a Loan?
The lender will consider the make, model, age, style, and overall condition of your car, as well as any alterations or modifications such as an after-market lighting system. If a trim level is applicable, that will factor in as well.
Instead of requiring that you bring the vehicle in for an in-person assessment, the lender will simply ask you to submit recent photos of the vehicle from all angles and in natural light. You’ll also need to include a clear shot of the odometer and vehicle identification number.
The other major determinant in loan procurement is income. The lender primarily wants to know that you can repay the loan. Thus, you’ll have to submit paystubs or bank statements.
Note that employment isn’t required for a title loan. If you have other steady income, that likely would work, too. Examples of alternate income sources include Social Security, alimony, child support, self-employment, settlement payments, retirement account, and Worker’s Compensation. If you have a question about this, call the lender in which you’re interested and ask.
You’ll also need to be at least 18 and possess a driver’s license or other government-issued photo ID, such as a passport. You’ll also have to provide proof of residence (lease agreement, utility bill, etc.). Depending on the lender, you might have to have a personal or professional reference, or proof of vehicular insurance.
Is the Process Fast?
The whole thing usually gets done within 24 hours, which is quite speedy considering all the moving parts. You’ll submit your application, including required materials, online, then await an answer that typically comes that day, if not within minutes.
Once you are approved, you can get the cash the next day, vis a vis direct deposit, an ACH transfer, an overnight check, or a wire transfer to a local MoneyGram.
The bottom line is that, as long as you’re totally sure you can make your loan payments, a title loan can help you out, fast, when your back’s against the wall.
With a solid foundation in technology, backed by a BIT degree, Lucas Noah has carved a niche for himself in the world of content creation and digital storytelling. Currently lending his expertise to Creative Outrank LLC and Oceana Express LLC, Lucas has become a... Read more