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The Go-To Guide on How to Get a Title Loan

You know those times when you really need cash and don’t have a lot of options. Applying for a bank loan requires standard criteria, including owning a bank account and having a good credit standing.

This narrows down your options, especially if you don’t qualify for bank loans. You may have heard of car title loans. They are pretty popular now, but do you know what they are all about?. This article answers a few frequently asked questions about car title loans.

Q1: What is a car title loan?

An online car title loan is a loan obtained using the borrower’s car as collateral. It could be an automobile, such as a motorcycle or truck. The borrower gives the lender the original auto title and a copy of the vehicle’s keys in exchange for your loan.

If the borrower pays up the loan, the vehicle remains his. However, if the borrower cannot repay the loan, the car becomes the lender’s property, and he may decide to sell it to recover the outstanding loan amount.

A car title loan allows the borrower to continue using the car as usual while repayment is being made. Thus, the only thing the borrower is required to do is keep paying the loan and the interest on time. Before you know it, the car is entirely back in the borrower’s ownership.

Q2: Do you qualify for a car title loan if the car is not fully paid for

Yes, you can. This is only possible if you have enough ownership of the car to facilitate the loan qualification. If the car has been used as collateral for another sort of loan, it will depend on how much percentage of the car owner you actually own to use it as collateral.

The best thing about car title loans is that the loans are dealt with as personal loans, meaning that every case is unique, depending on the borrower’s agreement with the lender. The lender will consider if the borrower can repay the loan and if the car qualifies to be used as collateral.

Q3: How high is the interest rate?

Car title loan interests depend on the lender lending you the money. It’s all about how the lender has set the rates. However, they lay up to about 20% of the money lent.

Moreover, the lender will inform the borrower about the interest fee and not the yearly cost of the car title loan. It is easy to know how much you need to pay annually using the interest rate given.

Say you pay about 25% interest rate. Then the APR will be 300%, meaning that you will pay back 300% of the money borrowed by the end of the year.

The interest rates of car title loans are pretty steep. However, a car title loan is quite flexible, which makes repaying the loan relatively easy. It should be noted that with the flexibility it possesses, the ability to negotiate the terms of the loan is effortless, assuming a friendly relationship has already been established between the lender and the borrower.

Q4: How much can be borrowed?

The amount depends on the value of the car and the condition it is in when you take up the car title loan. Typically, the more expensive the car, the higher the chance of getting a larger loan. The condition of the vehicle can be used as a bargaining point for the amount of loan you can get.

Essentially, car title loans can be as high as 50% of the car’s current market worth at the loan application. This percentage could still go higher, depending on the terms the borrower and the lender have established among themselves.

Q5: What is the term of loan repayment?

The lender establishes the duration of loan repayment in most cases. It could range from a couple of months to a few years, depending on the terms found when the loan was taken. The duration is negotiable and is designed in a way such that the borrower can pay up without any financial pressure.

Duration will depend on the loan amount and the borrower’s repayment ability. It is all documented in the contract. The period is never constant as it varies from one person to another.

Q6: Are credit scores needed?

The lender has little or no use for the borrower’s credit scores. The reason being the borrower is using his vehicle as collateral. This means that the borrower’s credit score does not play a part in the loan approval process. It’s all about the car’s condition and value in the market.

Q7: What happens if the borrower can’t repay the loan?

There are a couple of options if this happens. You may decide to roll over the loan. This lets you have more time to repay the loan, but rolling over will incur additional fees and a new interest rate. You may also take up another loan to repay the current one though this is extremely risky as it will plunge you into more considerable debts.

If everything fails, the lending company will take your car and sell it to recover the outstanding money. The company’s concern here is getting its money back and not selling your vehicle. The company may also give you a couple of alternatives to help you pay up.

Q8: How to apply for a car title loan?

Applying for car title loans is probably the easiest among other loans. You could call, write to the lending company or apply online to get the loan.

They will then inspect your car and sit down to discuss the loan amount, duration of payment, and other fees, charges, and terms of the contract. It’s always important to pay attention to the contract’s fine print.

Q9: Can you repay earlier?

This is not a problem for most lending companies. The borrower is allowed to pay off the loan earlier. Some companies, however, may require you to pay a prepayment penalty before you can clear the debt earlier. However, this depends on how the lender has tailored his policies.

Pros and cons of car title loans

Pros

This type of loan doesn’t need a good credit score to get one – it’s all about the condition of the car and the value it commands in the current market. The loan also is straightforward to obtain.

Cons

The only problem with a car title loan is that you may lose your car if you cannot repay the debt. This is probably the only disadvantage of car title loans.

Author: Julie Snearl

Editor and writer for over a decade , she has written and edited finance for both national technical and consumer readership, Julia Snearl is the editor for Personal Finance in KashPilot. Her experience in editing business books also includes working as the editor of charts of Ahead of the Curve. More than 3 years' experience in editing content for finance on KashPilot, Julie is interested in learning about how to use digital content to assist people make better financial choices.


Types of Loans We Offer

Installment Loans

Receive your cash and repay it in equal monthly installments. Each payment will include interest, and prepayment is any time without penalty.

Payday Loans

Payday loans online are loans given to people who need money in the short term. Most payday loans are meant for small expenses, such as utility bills or vehicle repairs

Loan Consolidation

KashPilot Offers Loan Consolidation Online for Bad Credit, these are people who can’t manage their loans or can’t repay all the fees and rates (apr) on right time.

Title Loans

KasPilot Offers Title Loans, Your vehicle’s title serves as collateral for a loan you may think of as a secured loan. When you use your car as collateral for a loan



FAQ's

A Payday Loan can be used to cover costs until your next income arrives. Whether you need to pay rent, cover an unexpected medical bill, or purchase groceries, Payday Loans can provide you with the quick cash you require.

You must produce identity, proof of income, a bank statement, and a personal check in order to qualify for a loan. If you do not have a personal check, you can offer a debit card or ACH authorization in several jurisdictions. There is no requirement for personal property to obtain a Cash Advance.

Payday loans are short-term loans owing on the borrower's next payday. Timing is contingent upon your pay schedule.

KashPilot's Payday Loans are accessible to all credit types. When KashPilot evaluates a Payday Loan application, a credit history is among the many elements analyzed.

Yes, Cash Advances are often referred to as Payday Loans. This is a short-term, personal loan that is payable upon receipt of your next paycheck.

State legislation establishes the maximum amount of money you can get through a Payday Loan. In addition, you will qualify for a specific loan amount, within the permissible range, based on your current income.

When evaluating your Cash Advance application, we may use information from third-party data sources to determine your creditworthiness.

Typically, your Payday Loan is payable on your next payday. We provide numerous payment alternatives, including in-person and online payment choices, to make the repayment of your loan easier (varies by state).

KashPilot has assisted thousands of individuals with poor credit by offering a number of financial options, such as Payday Loans, Online Loans, Installment Loans, Title Loans, and Personal Lines of Credit.