Applying for a Car Title Loan?

What do you Need to Know when Applying for a Car Title Loan?

thinking to buy a car

A car title loan is a secured loan where a person can use his or her vehicle as collateral against the loan. A car title loan can be a good loan option for someone who has bad credit or bankrupt or in a consumer proposal. Car title loans are also good options for those who do not have a steady income, such as people who are self-employed, those who work on commission and people who are on pension or disability.

However, there are a few things that you need to know before you apply for a car title loan.

Your Car Must be Paid Off in Full

A car title loan uses your car title as collateral. Therefore, you must own your car title. If you still have payments to make on your vehicle, then the car’s title is still held by the bank or financing company and you won’t be able to use it to get a car title loan.

You Must have Car Insurance

In order to get a car title loan, your vehicle must be insured.

Car Equity May Depend on the Wholesale Value of the Vehicle

In many cases, the amount of the loan that you will be able to get will be based on the wholesale value of your vehicle. This means that higher value vehicles and vehicles that are in better condition will likely be able to get you a larger loan amount.

The Loan Not Only Depends on the Car’s Value

However, the value of the vehicle is not the only aspect that is used to determine the amount of the loan. Several other factors are considered as well. These factors include the cost of monthly insurance, the debt-to-income ratio of the person applying for the loan and the monthly cash flow of the applicant. All of these factors will be considered by the lender and used to figure out what size of a loan you will be able to get.

Your Car Must be in Good Standing

Your car cannot have any other loans taken out against it or any other money owing on it for any other reason.

Ownership must be under the Borrower’s Name

The car title needs to be in your name in order for you to use it as collateral for a loan. You are not able to use a vehicle that is under someone else’s name for a car title loan, even if you are the primary driver of the vehicle. It has to be your car.

Once the loan has been repaid, the car title is returned to the owner. You are able to continue driving the vehicle while you are paying for the loan and you do not lose access to the car as long as you keep up your loan payments.

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The Benefits of Borrowing Money using your Car

Car_title_loan_bmwThere are a number of benefits to getting a car title loan. Here are the benefits of borrowing money using your car.

The Benefits of a Car Title Loan

Borrowing money using your vehicle as collateral is called a “car title loan.” Car title loans can be good options for people who are short on cash and who have bad credit or an inconsistent income.

However, that isn’t the only advantage to a car title loan. There are a number of other advantages.

Bad Credit is OK

As mentioned above, a car title loan is a good option for someone who has bad credit or very little credit. To get a car title loan, you simply have to have a vehicle that is paid off in full and meet a few other requirements for the lender.

Since the car is being put up as collateral, there is very little risk for the lender. That means you are more likely to get approved for a car title loan than you would be for a personal loan.

You Can Get Money Quickly

Since the car title loan process is very straightforward, you are able to get the money you need very quickly. The lender simply needs to ensure that you own your car and that it is worth at least as much as you are looking to borrow. The process is very simple which means that it is also very quick. You can likely get the money that you need within a day or two, which is great if an unexpected bill comes up that you have to pay right away.

The Loan is Secured

Since the loan is secured and your car is used as collateral, you may be able to get a lower interest rate than you would be receive on another type of bad credit personal loan. For example, when compared to payday loan services, car title loans have significantly lower interest rates. This means that you will spend much less money paying off the loan.

Using a reputable company to get a car title loan is a great way to get a lower interest rate. When you get a car title loan from a trustworthy and reputable lender, you will likely be able to get a lower interest rate and save yourself some money. This is why it is important to do research on lenders and to choose a lender that is reputable and that offers a competitive rate.

You Can Keep Your Car

When you get a car title loan, you don’t have to give up your vehicle. While the lender will hold the title and a set of keys to the car, you still have full access to the vehicle. This is a big advantage as you can continue to drive your car to work, school and anywhere else that you need to. There is no change in your lifestyle other than that you have received the loan.

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