Do you need additional funds but do not have sufficient creditworthiness? The solution in this situation may be a car title loan. In this article, we will discuss what this form is all about and whether it is worth using.
What is a car title loan?
A car loan is the possibility of obtaining additional cash in exchange for securing a liability for a movable property, i.e. a car in this case. This means that when we stop paying the debts, the creditor may request the transfer of ownership of the vehicle. These offers are available in non-bank companies only. They operate on a similar basis as installment loans, i.e. we can borrow higher amounts for a longer period.
A car title loan is a good option when we do not have sufficient creditworthiness to receive a bank loan or we need funds quickly and want to bypass the process of submitting a more complicated application. It usually takes longer to issue a credit decision at a bank. It is also necessary to provide income documents for at least three months. Indebted people, and even those who have a bailiff on their account, have an opportunity apply for a car title loan in non-bank companies.
In this case, the lender’s interest is secured on the car, which may become his property if we stop paying off the loan.
Who can apply for a car title loan?
A car title loan can be obtained by any car owner, as long as this property is not shared with other people. The required document is the vehicle registration certificate in which the details of the loan applicant are entered. The basic requirements must also be met, i.e .:
- over 18 years of age;
- valid ID card, e-mail and phone number;
- full legal capacity;
- ownership of the vehicle in question.
A car title loan is a solution for people whose creditworthiness is not sufficient to obtain a bank loan. Also, title loans are a perfect option for people who have bad credit history or unpaid debts.
How to get a car title loan?
Car title loans are available online. The application can be submitted via the website of non-bank lenders. You can arrange all formalities comfortably from home. Before we choose a specific solution, it is worth comparing the offers in the available rankings online.
In order to get a car title loan, you need to fulfill a few simple requirements:
- choose the right lender that suits all your requirements;
- go to the site and fill out a form in which you enter all the necessary information about yourself and the car;
- submit the application and wait for the lender’s response;
- upon receipt of a positive response, sign an online contract;
- funds will come to your account within one business day.
Completing the application should not take more than a few minutes. You will also know the maximum loan amount you can apply for immediately. Just complete:
- car brand;
- car model;
- date of first registration.
You will also need to provide the registration plate.
Car title loan – required documents
A car loan, in addition to the basic data from the ID card, requires additional documents, such as:
- vehicle registration certificate with a valid technical inspection;
- confirmation of payment of the civil liability insurance policy;
- vehicle card, if issued.
- Before signing the contract, you should verify the necessary documents, as each company can have an individual list. Usually, it takes up to 24 hours to respond to your request.
What does the car title loan agreement contain?
The title loan agreement is the main document that defines the rights and obligations of the debtor and the creditor. Attention should be paid to the clause of the transfer of title to security. It consists in transferring the ownership of the vehicle to the creditor.
Important! The car title loan agreement must indicate that the creditor undertakes to transfer ownership to the original owner when the debtor repays the loan.
In addition, the contract contains standard provisions on:
- loan amount;
- repayment terms;
- repayment date;
- forms of security;
- the consequences of non-repayment of the loan.
How much can you apply for?
The amount of the car loan depends on its value. The vast majority of lenders grant a loan in the amount of 60-80% of the value of the car that will be pledged. There may also be situations in which we receive a higher amount as lenders consider applications individually. At the same time, with such a lender as Loans360,the available amounts reach up to 10,000 dollars on average.
Car title loan – advantages and disadvantages
The advantage of a car title loan is that we can use the funds for any purpose. The lender will not check what we spend the cash on. Additional security makes this offer also available to people in debt or those who have negative credit history. High amounts of up to 80% of the car’s value are available.
The downside of the offers is that most lenders only accept applications from owners of vehicles whose car is less than 8-12 years old. In addition, in a situation where we stop paying installments, there is a risk of losing the car. And this is one of the most severe consequences, therefore, before we sign the contract, we must consider whether we will be able to meet the obligation and pay the installments on time.
Is it worth taking a car title loan?
A car title loan, of course, has many advantages. It is available to a wide group of potential customers. There is no complicated process, everything is done according to simplified procedures. It is definitely worth considering this option in a situation where the bank refused to grant us loans. On the one hand, it is an easy and quick way to get extra cash, but we also have the risk of losing the vehicle if something goes wrong. Of course, this is a less risky option than a loan against a flat or house, but it can also have negative consequences. Each decision should be carefully considered.