How do you get a loan on your car title?

So you’ve probably seen a commercial or two or drove by a sign that said “get $10,000 with your vehicle title” or “cash loans for your car title”, and most likely you’re wondering what’s the catch or how does it work?

There are a few misconceptions about title loans and how they’re set up that you should be aware of before you decide that this is the type of cash loan you’d like to sign up for today. We’ll get into that more in detail later and explain how they work and how to get one below.

What is a title loan?

A title loan is a 30 day cash loan where the borrower uses a free and clear title with no liens of their motor vehicle (i.e. car, motorcycle, boat, etc.) as collateral to help them secure the loan for a larger amount, usually for a percentage of the vehicle’s value and up to $10,000.

Since the loan is secured, the amount borrowed can usually be financed at a lower rate than some other fast cash loan products available. Plus, the credit check is less involved, whereas a traditional credit bureau report is not needed. Therefore borrowers may find that this type of loan is an easy way to access a larger amount of cash fast.

Watch: How title loans work

How do title loans work?

With a title loan, the lender will hold the title as collateral until the loan and fee is repaid. If the borrower needs more time to repay, he or she may pay at least the interest amount due and opt to renew their loan for another 30 days and so forth.

Typically these loans are ideal for borrowers with a solid income who need access to a larger amount of money, but don’t have the type of credit to qualify for a large installment loan. It is a best practice if getting a title loan to only take out what you need and can responsibly repay in ideally 30 days.

How to get a title loan?

The application process is quite simple. Here is a step by step by to get a title loan.

Get your title free and clear of a lien: The title you bring has to be in your name and it has to be paid in full from the dealer or individual where it was purchased. You may also have a title that had a lien holder on it, but the lien holder has to have signed off on the lien.

If you have purchased a vehicle from an individual and the title is just signed over to you on the back of it with a bill of sale, then you will need to visit your local DMV, and have the title placed in your name before you can move forward with a title loan.

• Locate a lender you would like to use: Finding a lender can be hard. Most people will ask friends or read reviews online to decide where they would like to get a loan. Online reviews are an extremely useful tool that will let you know the good with the bad. A good place to check out reviews to your lenders is on Trustpilot.com or on Google reviews.
• Application process: Once you find a lender, you will need to fill out an application with basic information in order for them to determine your loan amount. Most lenders will need you to bring in certain documents in order to complete a loan. Some lenders may ask you for the following:
• A state-issued photo ID (driver’s license)
• Proof of residence (utility bill)
• Proof of income (recent pay stub, award’s letter)
• Proof of insurance
• Tag receipt
• Deciding the correct loan amount. Most companies will determine the loan amount according to several different factors:
  • The value of your vehicle. Your vehicle’s information will be entered into to a database like Kelly Blue Book to come up with a fair value. The amount is typically anywhere from 25%-80% depending on mileage and/or if it’s a rebuilt title.
  • Your income and ability to pay back the loan. Obviously the lender is lending out money they expect to be repaid back, so your income will help lenders determine a safe loan amount to offer.
  • How much you need to borrow. How much you need is also taken into consideration when determining the loan amount. For example, you may be approved for $1,000, but you may only need to borrow $500.
• Vehicle evaluation: The lender will need to check out the condition of your vehicle, so be sure to bring your vehicle with you when you apply. The lender will look at the overall condition of the vehicle, listen to it run, and take anywhere from 5-7 pictures of the interior, exterior, odometer, and vehicle identification number.
• This gives the lender additional information to determine the value of the loan is available. If you have a spare key, it is always good to bring it with you. Some companies will require that they keep a key during the time of the loan.
• Closing process of the loan: This is best part of this process when you receive your money! You will also go over your contract, due date, and amount to pay back. You will also hear about potential consequences if you do not pay. For example, a vehicle to a title loan can be repossessed if the payments are not made on their due dates. However, to remain in good standing with your lender, it is always a best practice to stay in communication with your lenders in case something comes up and you need to make payment arrangements for example. Learn more on what happens when you default on a car title loan here.

When you get a title loan, you keep your car and walk out with the cash you need in often less than 30 minutes. So if you need money in a pinch, have less than ideal credit, and have been denied with other types of loans, you may find that a title loan is just what you’ve been looking for to get the help you need in as easy as 1-2-3.

For over 20 years, Always Money Finance has been a regional leader in providing affordable credit solutions to customers across the southeast looking for a convenient and confidential way to meet their needs. Getting a handle on your money takes time, and Always Money understands. If you’re in a jam and need immediate help, any of Always Money’s loan options may be just what you need to get you going in the right direction.

To get started,

• Visit a store near you (Click here to find the store nearest you),
• Call 1-888-618-9217 to get pre-approved over the phone, or