Everything you need to know before applying for an auto title loan
If you are wondering to what a title loan is, and how they work, you have come to the right place. Often times our customers find themselves in need of emergency money, whether it be to pay emergency bills, for an unexpected life event, or simply because they would like the peace of mind of the extra money in their pocket till next pay period.
If you, like many others, find yourself in need of emergency funds, you may be thinking to yourself, “what is a title loan and how do they work”? Whenever you are interested in applying for a loan, it is important to have all of your questions answered beforehand.
Getting a title loan is simple once you understand how they work!
Before we get started, you should know that a ‘title loan’ is called many different things, depending on where you live in the world. A title loan is also commonly referred to as an auto equity loan, a title pawn, a pink slip loan, an online title loan, or an auto title loan. All of these names refer to the same thing, which is a loan in which the customer receives cash and gets to keep driving their vehicle. When a customer is approved for an auto title loan online, they are required to put the vehicle that they received the loan on as collateral.
One of the most beneficial aspects of a title loan is that you are able to keep your vehicle and continue to drive and use it as you please. Another great thing about a title loan is that you are typically able to get more money than other loan types. Many customers who are looking for an auto title loan may have also been searching for loans such as a personal loan or a payday loan. The benefit of an auto title loan is that your vehicle is used to determine how much you will be approved for on the loan, not your credit. No credit auto title loans are becoming increasingly popular throughout the United States. Once you feel more comfortable knowing exactly what a title loan is, check out the most trusted companies in the nation.
No credit check title pawn– Can I get a title pawn with bad credit?
In fact, the fact that you are able to get a title loan with low credit, bad credit, and even no credit at all, is what makes them so appealing. Unlike other short term loans such as a payday loan, title loans are generally kept out for a longer amount of time. Depending on how much you take out on the loan will determine how long your repayment will be. Once you have applied for a title loan online, your loan officer will take a look at your vehicle year, make, and mileage. Depending on which type of vehicle you have, and what condition it is in, will determine how much the lender will be able to give you.
How much can I get with an online title loan?
For example, a customer with a 2006 Honda Accord may be approved for a $4,000 title loan, while a customer with a 2015 Dodge Durango may be approved for a $14,000 loan. Asking yourself how much can I get with an auto title loan? Try our title loan calculator or speak with a representative today.
One surprising thing that many customers don’t consider when getting an auto title loan online is that your credit score can actually raise over the course of the loan! If all of your payments are met on time, it shows banks and other future lenders that you are a reliable and trust-able customer, and that they will be able to lend you money with less risk. This could mean that the next time you need emergency cash, you can be approved for other loan types.
Does income matter for an auto title loan?
Although the amount of your online title loan depends on which type of vehicle you have and how much the lender is willing to give you, your income is considered as well as it is important to be sure that you are able to repay your loan. The title loan company that you work with will likely require that you prove at least one income statement showing that you have money that you receive on a regular basis so that you can make the monthly payments on your title loan.
If you make a large amount of money per month, you may be granted additional money on your loan even though your vehicle may not be worth as much. The same thing goes for if you have a very nice vehicle, but have a lower monthly income. Title loan lenders may lend you slightly less for your vehicle in this scenario.
For example, if the customer above was approved for a $4,000 title loan on their Honda Accord but made a good amount of monthly income, the title loan lender may be willing to go up to $5,000 because they know the customer will be able to repay the loan. If for example the customer with the Dodge Durango and was approved for $14,000 has a lower amount of monthly income, they may only end up being approved for $11,000 so that they can comfortably make the required monthly payments. (These numbers are just examples. Your loan officer will walk through exactly how much you can be approved for)!
What are the down sides to a title loan?
Although there is many upsides to a title loan, such as instant approval, same day cash, and that you are able to keep using your vehicle, it is important to realize what can happen if you default on your title loan payments. Because the title loan lender is trusting the fact that you will repay the money that they lent you for nothing in return, they will put a ‘lien’ on the title of your vehicle. A lien is basically a company’s way of showing that you are still making payments to them for a service.
Think of it like this. When you first bought your car, you likely had monthly payments that you were making to the bank or the dealership. You still had your vehicle and were making payments on it to own it, but the company you bought it from had a lien on your title. This lien is to show that there is an outstanding balance on a loan. It is important to realize that one of the biggest drawbacks to an online title pawn is that your vehicle has the ability to be repossessed by the title loan company if you do not make your monthly payments on time. This is why it is extremely important to make sure that the amount of money you are taking out on the loan is an amount that you are comfortable paying back on a monthly basis. Wondering how much your title loan payment would be? Try our simple 3 step title loan calculator and see.
Are title loans expensive?
Title loans are often seen as expensive to long term customers. Like many other emergency and short term loans, such as payday loans and bad credit loans, title loans generally have higher interest rates due to their convenience. Whether you are looking for an auto title pawn to simply make an emergency payment and you plan to pay off the loan instantly, or you are in need of a few thousand dollars and plan to pay back the loan over the course of the contract. It is important to remember that like any loan, you will be paying more money on interest the longer you keep the loan open. When you commit to a title loan, one of the most important things to do is to create a budget. Creating a budget ensures that you will be able to have enough money in the future to make your monthly payments.
Be sure to ask your lender if there are any fees associated with the title loan when you are in the underwriting process. Some companies have instant title loans with no fees, while other companies will take longer to approve you if you are requesting a larger loan amount. If you find yourself in a scenario where the fees associated with the loan are too high for your comfort, don’t be discouraged. Remember that the title loan company is competing for your business, not the other way around. Simply try a trusted title loan lender near you and be approved today.