A car title loan (also known as an “auto title loan” or simply “title loan”) is a short-term loan in which the borrower’s car title is used as collateral. The borrower must be the lien holder (i.e. own the car outright). Loans are usually for less than 30 days. If the loan is not repaid, the lender can take ownership of the car and sell it to recoup the loan amount.
A car title loan often makes sense for people who have bad credit. It allows you to get a loan without paying the high interest rates that typically come with other types of loans. It’s certainly cheaper to a pay day loan, which will cost you a very large amount of money if it’s not paid back quickly.
But what do you need to get a car title loan? Here are the general requirements.
One of the most important requirements is that you need to have the title of the car. This means that you will need to own the car outright. If you still owe money on your car, the bank or the lender associated with the loan will still have the title. This means that you won’t be able to get an auto title loan. The same is true if there is more than one person on the car title. You’ll need to own the vehicle outright on its own in order to get an auto title loan.
The vehicle can also not have any other loans against it if you hope to get a car title loan. If the car was recently under lien from another lender, but that debt has since been paid off, you will need to show documentation that proves this. These documents can usually be acquired from the other lender.
You will also be expected to provide some sort of financial documents. While you usually don’t need to have full time employment to get a car title loan, you will need to show that you have the ability to pay back the loan. There typically is no credit check with an auto title loan since you are putting the vehicle up as collateral.
Identification is also required. You need to show proof of ID as well as proof of residence in order to get a car title loan. You will need to show proof of insurance as well.
A car title loan is generally an easier loan to get than many other loans. This is because you are putting your vehicle up as collateral. However, there are still requirements that you will need to keep in mind if you hope to get an auto title loan.
The faster you are able to provide the documents needed, the faster you will be able to get your loan, and so it makes sense for you to know what the requirements are. This will allow you to have everything ready when you go in to apply for the auto title loan.