So, you’ve found yourself in need of quick cash and you’ve heard about something called vehicle title loans, where you can use your car to get a loan. That would work for you, since you’re ineligible for a bank loan, which would take too long to get anyway. And you don’t want to be stuck with a payday loan, which would come do when you got your next check. But you may be wondering, what are some reasons to get a title loan? Read on.
What is a Title Loan?
This is a short-term loan that’s secured by your vehicle, meaning that your vehicle is used as collateral. While each company has its own policies, and every state its own laws, such loans allow you to continue driving your car while making payments. Just be sure you make them since your vehicle can be seized and sold if you don’t.
Once you pay off your loan, plus fees and interest, you can redeem your car’s title.
What is Needed to Get a Title Loan?
You basically need a car in your name with a clean title – one with no liens. Most loan companies also require the vehicle to be insured. You’ll also need proof that you can repay the loan, usually in the form of paycheck stubs.
Other than that, a loan application requires your full legal name, your address, and your phone number. You’ll also need to provide the make, model, and year of your vehicle, along with the mileage. That’s in addition to exterior and interior photos. You can usually supply all this online.
How Much Can I Get with a Title Loan?
Again, it depends on the company, but you can typically get between 25 percent and 50 percent of the vehicle’s value. What is meant by “value” varies, but it generally refers to the vehicle’s condition, age, and the number of miles on it.
The average loan is for between $100 and $5,500, while some loans are written for $10,000 and more.
Why Get a Vehicle Title Loan?
- Your credit score is irrelevant. This kind of loan is ideal if your credit is subpar. Why? Your vehicle is collateral, so lending companies don’t much care. In fact, you can use your title loan to help rebuild your credit.
- Flexible repayment. Payday loans extract cash from your checking account when you get your next check. With a title loan, though, you can repay in installments. You needn’t get stuck repaying funds you don’t have a week or so later, just to borrow again to get through another month. You can get title loans online with direct deposit.
- Fast process. Even if you may be eligible for a bank loan, the approval process is plodding, to say the least. You need cash NOW. With title loans, you can sometimes get funds the same day, and often within 24 hours.
- You can borrow up to your vehicle’s value. How much you can borrow largely depends on your vehicle’s value. This means you potentially could borrow much more than you’d be able to from a bank or payday loan company. Many lenders use a complex formula that is based on your debt-to-earnings ratio to fix the amount you can borrow. That’s not the case with car title loans.
Indeed, the reasons to get a title loan are many. The bottom line is that, if you’re in a pinch, and you have a car free and clear, you can bypass banks and predatory payday loan companies and get an easy loan that allows you to hang onto your car while you’re making payments. We suggest you go with LoanMart for your title loan needs.