If you need a quick influx of cash, but your credit score isn’t all rosy, getting a title loan might be a solution.
This type of short-term loan requires you to provide your car as collateral and has a high interest rate (usually an annual rate of 300% or APR). To be eligible for this type of loan you must be the outright owner of your car, and if you fail to pay your rates on time, the lender has the right to repossess it. It’s similar to a payday loan in that you usually have 30 days for a lump sum payment.
What would you like to know
As with any financial decision, a loan is something that should not be taken lightly. We will try to explain as simply as possible the car title loan terms and how to get the loan as soon as possible. Before you start getting into the whole business, there are a couple of things you need to think about, how much money you really need, don’t overdo it with the amount, and be sure you have a plan to pay off the loan on time, so you don’t lose your car for a fraction of its value for no reason.
In order to apply for a title loan, you will need to bring your vehicle and the necessary documents to the lender. The vehicle will undergo an inspection so that the lender can check its condition and verify if you have the necessary complete documentation. Here is the list of necessary documents:
- The original car title showing that you are the sole and pure owner
- ID that matches the name on the title (government issued)
- Proof of residence with matching name (such as a utility bill)
- Current car registration
- Proof of vehicle insurance
- Proof that you can successfully repay the loan (like a recent pay stub)
- Names and addresses of at least two references, as well as their telephone numbers
- Car key copies
Some lenders may also attach a GPS tracking device to your car so you can track it or even turn it off if you fail to make the payment on time.
The lender will usually not verify your credit rating at all, so don’t worry about that side of the deal. On the other hand, the fact that you can get a loan with a bad score means that the interest rates will be very high. They also won’t check if you are currently employed. The amount of money you can lend is usually 25% of the vehicle’s estimated value, so keep that in mind. This percentage can vary, however, some lenders can approve up to 50% of the value of the cars for the loan, so be sure to find out what different lenders have to offer if you need more money. important. Also, make sure you already know your car’s estimated value before it is appraised to ensure you’re getting a good deal.
How to get the loan as quickly as possible
The entire process, from applying for a title loan to starting out with the money in your hands, can be completed in as little as 30 minutes. The main thing is to be prepared beforehand, to make sure that you have gathered all the documents listed, and also that your state does allow this type of loan (not all do). The lender will assess the value of the car and check its condition, but you should have your car appraised by a third party first to make sure you know its true value. If you have everything prepared correctly and there is no problem with your license and car title, the whole process should not take more than half an hour and you can solve the financial crisis that prompted you to take out the loan in the first place. From the moment you leave the money with the lender, the repayment period begins. Make sure you will be able to make the payments on time, to avoid losing your vehicle which is worth several times more than the loan itself.
These types of loans should only be considered as a last resort, so if you don’t have an urgent need for cash or your credit score is good enough to try and get a traditional one, you shouldn’t. rush to get a title. loan, as tempting as it may sound to have the cash on hand so quickly. If you decide, you’ve been given a concise list of what’s needed and tips on how to avoid extending the waiting period for approval.