Are you ready to deal with an emergency if one comes up? You know something is bound to go wrong at some point, whether it’s a broken water pipe, car repair bill, or unforeseen medical expense. You don’t have the cash to cover the costs in an account, and your credit cards are pretty much maxed out.
So, what’s the solution here? Well, you can also try getting a loan from a traditional lender. However, you may not have time to wait through the approval process. If you need cash fast, title loans may be the perfect solution.
Not sure what a title loan is or how to get one? Here’s everything you should know about title loans to see if they’re the right fit for you and your particular financial situation.
How to Apply for a Title Loan
Okay, if you’re not sure what a title loan actually entails, it’s a way to quickly borrow money without going through a credit check. You get cash, typically within a few minutes, by putting your vehicle up as collateral. This can be a viable option if you can’t secure or don’t have time to wait for a traditional loan.
So, how do you go about getting a title loan? The process is relatively easy, but you must bring a few items.
Necessary Documents
You will need to supply the vehicle title and it must be solely in your name. No, you can’t use a title with a co-signer or joint vehicle ownership. Why? Simply put, you can’t put someone else’s property up as loan collateral.
If you have a co-signer or the vehicle has more than one owner, it’s illegal to use it as collateral. You’ll also need to bring your current and valid driver’s license, along with proof of auto insurance and the vehicle’s registration.
Some title loan companies may request additional documentation, and this can include:
- A utility bill or bank statement verifying your current address
- Contact information for two references
- Pay stubs or bank statements as proof of your ability to repay the loan
You’ll also need to bring an extra copy of the vehicle’s keys. You may even need to activate the vehicle’s GPS or install a tracking device. This way if you don’t repay the loan the title company can find your vehicle without too much hassle.
Fill Out the Loan Application
After getting all of your documents together, the next step is to head to the title loan company. Don’t worry, if title loans are legal in your state, you’re not going to have a problem finding an office close by. Some neighborhoods have title loan companies on almost every corner.
Don’t worry about the loan application, it’s pretty straightforward. You’ll fill out your name, address, and vehicle information. The questions are typically limited to vehicle make, model, etc. You’ll also need to fill out the field asking how much you want to borrow. Before getting too excited, title loan companies typically limit your borrowing amount to around 25% to 50% of the vehicle’s value.
Not sure what your vehicle is worth, check with the Kelley Blue Book. Chances are this is the same resource the title loan company also uses. After signing the application, turn it in, sit back, and wait a few minutes to learn if it’s approved or denied.
Choose a Repayment Plan
Some title loan companies offer a variety of repayment plans and others only have one option. If you only have one option, think about the repayment schedule carefully before accepting the loan.
Don’t forget, if you miss a payment the title loan company has the legal right to repossess your vehicle. Most will give you a bit of a grace period, but not all. Even if they’re willing to overlook one missed payment you probably won’t get lucky again.
If you can select a payment plan, you can stretch the loan payments out. However, don’t forget about the interest. Your title loan probably comes with 25% or higher interest rates. The longer the payment plan drags on, the more you’re paying in interest. You may end up repaying the original borrowed amount two or three times over.
Turn Over the Keys and Title
If you agree to the loan terms, the final step is turning over your vehicle title and spare keys. Don’t worry, you keep the vehicle, at least as long as the payments are made. After turning over the title, you receive your cash, and the process is done. Yes, it’s really this easy to get a title loan.
Title Loans are Quick and Easy
Sometimes you need cash in a hurry, and a title loan may be the answer, offering a quick source of funds by using your vehicle as collateral. Before you commit, it’s crucial to do thorough research and consider the high interest rates associated with these loans, which can significantly affect your finances.
If, after careful consideration, you decide a title loan is the right choice for you, ensure you have your vehicle’s title in hand and proceed to the loan office to complete the necessary paperwork and receive your funds.
