iQuanti: Title loans offer borrowers with vehicles a rapid way to borrow money and are a great option for those with poor credit. But it's important to figure out how much you can borrow so you can figure out whether a title loan can cover your cash needs. Below, we'll explore how title loans work and how your loan amount is determined.
How do title loans work?
Title loans are short-term loans — generally lasting 15-30 days, but sometimes up to a year — that use your vehicle as collateral. In many cases, you must own your vehicle free and clear to qualify for one of these loans.
Once you're approved for a title loan, you'll hand your title to the lender in exchange for the loan amount. They will then give the title back once you pay off the loan.
Although lenders may check your credit score, they often have lenient requirements and will consider other factors like income and employment history along with your vehicle's value.
How much can I borrow with a title loan?
Title lenders use your car's value to determine your loan amount. After they appraise your car, they'll typically offer you an amount worth 25% to 50% of your car's value.
Additionally, some states set minimum and maximum title loan amounts. Lenders can't offer you less than these minimums or more than the maximums in those states.
Title loan application process
Many lenders will let you apply for a title loan online or in-store. Keep in mind that you'll need to own your vehicle outright to qualify for this type of loan. Here's how you can apply:
In-Store
If you go in-store, you'll need to bring the vehicle, its title, proof of insurance, and a form of photo ID. You may need proof of income and your spare set of keys as well. The lender will then review the documents and appraise the vehicle to determine its value.
From there, the lender will make you an offer if you're approved. You can then accept the offer by signing the paperwork and handing over the car title. Then, you'll receive the funds and can drive off in your car. As long as you pay back the loan in full, you'll get your title back at the end of the term.
Online
Today, some lenders will allow you to apply for car title loans entirely online as well. First, you'll start an application and upload your documents, such as:
- Car title
- Proof of income
- Proof of insurance
- Photo ID
- Mailing address
The lender will then appraise your car before making you an offer. In some cases, they may need to send an appraiser to your home or have you come to their physical store to finish the process.
If not, you may get an offer along with an electronic contract. Once you sign the contract, the lender will either mail you a check or wire you the money. Once again, you can continue driving your car while the loan is outstanding.
Title loans: fast cash for vehicle owners
Title loans can be excellent for borrowers who need some extra money in a pinch, especially those with poor credit. The speed and convenience of these loans is great if you need to cover expenses right away. Just make sure you understand the loan terms and can pay back a title loan before applying.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
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Original Source: How Title Loans Work
