The title to be used as collateral must be in the name of the borrower. A car title loan is a type of secured loan that serves as a means of providing emergency loans for people who are in need of cash. Like another type of secured loan, you will need collateral to obtain a car title loan and in this case, the title of your car is used as the collateral.
How much Can I get When I Apply for a Car Title Loan
The amount of loan you can get when you apply for a car title loan is dependent on the equity of your car. Your car is evaluated using the Kelly Blue Book and you can get at least 50% of the equity of your car when you apply for a car title loan.
What If I Default?
If you default and do not show signs that you will turn a new leaf, your lender might be forced to repossess the car, sell it off to cover for the loss on the loan. It is advisable that you try as much as possible not to default when you apply for a car title loan as this will not help your credit profile, it will further worsen it. As a matter of fact, if you handle your car title loan well by paying on time without defaulting, it can go a long way in reflecting positively on your credit score and in no time you will be creditworthy.
Hence, before you go for a car title loan, make sure you have a definite plan on ground to pay back the loan, and also see it as an opportunity to boost your credit score. Paying your bills and debts on time will have a positive impact on your credit profile. Make sure all your payments are captured in your credit report.
How to apply for a Car Title Loan
The following are the steps to follow when you want to apply for a car title loan;
- Apply: Apply for a car title loan in the physical office of a lender near you or apply online.
- Provide Documents: Provide all necessary documents as requested by your lender. Some of the documents required may include a government-issued ID, vehicle insurance, proof of residence, age declaration to ascertain that you are at least 18 years old, and proof of steady income among others.
- Get Approved: If all documents submitted are in order, you will be approved almost immediately and you will get to know how much loan amount you can get.
- Receive Cash: The approved loan amount is paid into your account via bank transfer or other means as you may request.
Benefits of Car Title Loans
- You can still drive your car while you pay off the loan.
- No credit check required.
- It is fast and easy to get a car title loan.
- Interest rate is affordable.
You can negotiate your payment and loan agreement