If you’re short on cash and something’s come up that requires it, your options may include a vehicle title loan. As you may infer, obtaining one requires a vehicle and a title – plus loan repayment income. To give you an idea of the amount you can borrow, a title loan estimator can help you. Here’s more about that and other information you should know about such loans.
What is a Title Loan?
This is a short-term loan wherein the lender takes the borrower’s vehicle title in exchange for the funds and a promise of repayment, usually in 14 to 30 days. Once the loan is repaid, the title is returned. A key feature of title loans is that you can keep your vehicle while you’re making loan payments.
It’s important to understand that because the loan is secured, your vehicle is at risk of seizure if you don’t make timely payments. So, be 100% certain you can pay the funds back before you sign off on a loan.
By the way, “vehicle” can often mean RV, truck, or motorcycle in addition to a car. Call the lender and ask if you have something other than a car or truck.
How Much Can I Get?
The amount of your offer will largely depend on your vehicle and your income. The title loan company will consider the make and model of your ride, in addition to its age, mileage, and overall shape. They will also factor in trim level and the vehicle’s style as well as any alterations or modifications.
The best title lenders will provide a calculator that will allow you to input the above information to see what your offer might be. Having said that, the average title loan runs between $100 and $10,000.
In lieu of having to take your vehicle in for an evaluation, some lenders will allow you to simply submit recent, quality photos of the vehicle you’re securing from all angles, plus clear shots of the vehicle information number (VIN) and odometer.
In addition to the amount of equity you have in your vehicle, your loan offer will hinge on your income – the more you earn, the more you can likely get. You will need to provide proof in the form of paystubs or bank statements, etc. Even if you don’t have a 9-to-5, other steady income is also commonly accepted. Sources can include, for example, Social Security, Worker’s Compensation, rental property, settlement payments, self-employment, alimony, child support, and retirement account.
What your loan’s approval will not hinge on is your credit score. While the title lender might run your credit, it won’t focus on it. In fact, title loans are especially popular among those who either can’t get a traditional bank loan, or don’t have the time it takes for such loans to be processed. The bottom line is that title lenders are much more interested in your vehicle and income.
What Else Do I Need for a Loan?
That varies by lender and the state in which the lender’s located, although you will need a driver’s license or other government-issued photo identification, such as a passport. You’ll also have to show proof of state residency (lease agreement or utility bill). Some lenders will require a personal or professional reference, or vehicle insurance.
How Soon Could I Get Cash?
You could have cash in hand within 24 hours of approval. You’re typically allowed to apply online, then once you’ve completed the application and submitted required documents, you could be approved within minutes. Once you are approved, funds are usually available on the very next day. Your cash retrieval options will likely include direct deposit, ACH transfer, or a wire transfer to a local MoneyGram location.
Title loans are increasingly popular, particularly in this uncertain economy, as a way to get cash fast. Just be completely sure you can repay such a loan before you take one out.
