Title loans, also known in some areas as “auto equity loans,” allow borrowers to bridge temporary gaps in income by putting their car up as collateral for a loan.
Title loan companies use the equity in your paid-off vehicle to determine the size of the loan, and, unlike collateral loans through pawn shops, title loans allow you to keep your property while you pay off the loan.
If you default, the lender will seize the vehicle and sell it to recoup the loan funds. Only the owner of a vehicle can use the car as collateral for a title loan.
Title loan companies use the equity in your paid-off vehicle to determine the size of the loan, and, unlike collateral loans through pawn shops, title loans allow you to keep your property while you pay off the loan.
If you default, the lender will seize the vehicle and sell it to recoup the loan funds. Only the owner of a vehicle can use the car as collateral for a title loan.
Vehicle Documents
To prove you are the rightful owner of the car and that there are no current liens, you must furnish the vehicle title and registration. Title loan companies also require proof of insurance so they are protected against loss if the car is damaged or stolen.
If the car was under a previous lien that was recently released, you must provide the lien release paperwork from the previous lienholder.
If the car was under a previous lien that was recently released, you must provide the lien release paperwork from the previous lienholder.
Residency Documents
Title loans are not available in all states, so you must prove that you live in a locality that allows them.
Residency documents also help verify your identity. Lenders need to see a recent utility or phone bill, along with your house deed, lease or a statement from your landlord.
Residency documents also help verify your identity. Lenders need to see a recent utility or phone bill, along with your house deed, lease or a statement from your landlord.
Use a Title Loan Calculator
If you are looking to get a quick estimate for a car title loan, you can use a free calculator online. I recommend this calculator: www.velocitycash.com/title-loan-calculator/
Reference Information
Most title loan companies require at least two references, although many require three to five.
While the lenders claim that references help them determine your character and ability to repay the loan, title loan companies usually do not contact your references unless you default and they are unable to contact you.
Most lenders require at least one personal and one professional reference. Include your references’ names, phone numbers and their relationship to you.
While the lenders claim that references help them determine your character and ability to repay the loan, title loan companies usually do not contact your references unless you default and they are unable to contact you.
Most lenders require at least one personal and one professional reference. Include your references’ names, phone numbers and their relationship to you.
Know the Payment Options Available to You
Before you go ahead to take out a title loan make inquiries to be sure about how the lender plans for you to repay the loan, either by direct payment or from your paycheck. Beyond this, you also need to find exactly how long your title loan will last.
Like any other loan, a longer repayment period translates to lower payments each month.
However, the disadvantage there is that you are going to be paying more each month on finance charges, so do your best to ensure that your loan is outstanding for the shortest possible time.
Like any other loan, a longer repayment period translates to lower payments each month.
However, the disadvantage there is that you are going to be paying more each month on finance charges, so do your best to ensure that your loan is outstanding for the shortest possible time.
Make Sure You Can Keep Driving Your Car
This might seem incredulous considering the fact that almost every car title loan lender will let you keep driving your car after you have accessed the loan. However, every now and again you will likely meet a lender that requires your car to be impounded with them for the life of your loan.
Some others might let you drive your car but put a tracking device on it to monitor your every move.
Granted, this is becoming less common but make sure as car title loans gain more popularity and acceptance.
Still when applying for a car title loan with any lender, make sure that they will let you keep your car.
Some others might let you drive your car but put a tracking device on it to monitor your every move.
Granted, this is becoming less common but make sure as car title loans gain more popularity and acceptance.
Still when applying for a car title loan with any lender, make sure that they will let you keep your car.