What You Need To Know About Car Title Loans

what to know about car title loans auto loan

Understanding How They Work Will Help You Get Fast Cash 

Taking out a car title loan is a fast and easy way to get cash quickly when you need to make an urgent purchase, pay a bill, or make it between paydays. Before you take out a car title loan, however, you’ll need to know a few important things. 

You Must Own Your Car 

When it comes to car title loans, in order to get one, you must own your own vehicle, and the title must be in your name. In most cases, you cannot have any other liens on your vehicle, meaning you cannot owe money to anyone for your vehicle, including to other title loan companies or your car loan lender. You may have heard of this called owning your vehicle “outright” or having a “clear” title. 

You’ll need to prove you own your vehicle by presenting your title when you apply for the auto loan. 

You Get To Keep Your Car 

When you take out a title loan, you leave your car title as collateral, but you can drive away in your vehicle the same day. When you pay back your loan, you’ll get your car title back. Because title loans use your title as collateral, there is no need to have your credit checked or prove your credit score. However, if you don’t pay back your title loan, you could be risking having your car repossessed, so always be sure to pay back your vehicle loan! 

You Must Be 18 Or Older 

Federal law prohibits title loan companies from lending to minors. That’s why it’s impossible to get any title loans if you’re younger than 18. 

To prove that you’re old enough to take out a title loan, you’ll need to present your photo ID, like your driver’s license, to the title loan company when you apply for a loan. 

You Should Never Take Out More Of A Loan Than You Can Repay 

While you can drive your vehicle away from the car title loan company when you take out a loan, if you don’t pay it back, you could lose your car. 

That’s why it’s so important that you never agree to take out a larger loan than you can afford to repay. To do so sets yourself up for failure. If you must apply for a title loan, take only the minimum amount you need to get by. 

Car Title Loans Are Nothing To Be Ashamed Of 

For many people, admitting they are short on cash feels shameful or embarrassing. But there’s no need to feel that way! Many people find they have an unexpected bill or owe money to someone and need to pay quickly. 

Taking out a title loan shouldn’t be humiliating. Enter the title loan company with your head high, be honest about the cash you need, and provide all the necessary documentation, so you can leave with the money you need and get one step closer to achieving financial freedom. 

You’ll Have A Loan Repayment Deadline 

When you take out a title loan, you’ll be asked to agree to a deadline by which you’ll have the loan repaid. The title loan company should be quite clear about this due date. 

If, for some reason, you can’t pay back your loan before your deadline, contact the title loan company. Many, as is the case with Kansas City title loans companies, will work with you to extend your loan term to a comfortable length. 

Your Loan Will Accrue Interest 

Just because you’ve left your car title as collateral doesn’t mean that your loan payback amount will be dollar-for-dollar what you borrowed. In fact, it would be strange if it were! 

When you take out a car title loan, the lender will talk to you about the interest rate and how it is accrued on a daily basis. Pay close attention to this information, as it will directly affect how much money you must pay back to close out your loan. 

You Must Bring Your Car On Site 

When applying for a car title loan, you already know you need your photo ID and your car’s lien- free title. But you also must bring your car! 

Quickly appraising your car is one way a car title loan company determines how much money they can lend you. That’s why they need to see your vehicle. Drive it in so that it is present when you apply for your loan. 

Some Car Title Loan Companies Offer Other Types Of Loans 

If you don’t want to take out a title loan, some car title loan lenders offer other short-term loan products and even long-term lines of credit. 

Not every car title loan company is the same, so if you’re looking for a more unique loan product to meet your financial needs, ask around your local lenders to find one to suit you.

Official Bootstrap Business Blog Newest Posts From Mike Schiemer Partners And News Outlets