How Do Title Loans for Bad Credit Work?
Securing approval for a personal loan without a desirable credit score is difficult to say the least. Lenders will view you as a high credit risk during your application and therefore, more likely to default on your loan. As a result, your application for a personal loan is likely to get declined when you have a low credit score.
Instead of applying for a personal loan, another option is to apply for title loans with bad credit. Unlike personal loans or other forms of unsecured credit, title loans can be much more flexible and convenient. Since a borrower is required to pledge their vehicle’s title as collateral for the loan, the application process is fast and flexible – even with bad credit!
Unlock cash by using the title to your car, truck, or SUV as collateral for a bad credit title loan. With a title loan, you are borrowing against the available equity in your vehicle which can allow you to access up to half of its value upon final approval. By keeping up with your title loan payments, you will be able to maintain use of your vehicle throughout the entire repayment process.1
A car title loan can be an option for people with poor credit who need access to money quickly. If you meet the initial requirements and submit the correct documents, you may receive approval for a title loan the same day you apply! Submit a pre-approval form online or apply over the phone with a LoanMart title loan agent by calling 855-422-7412 and receive your funds in as little as 24 hours if you qualify!1 3
How to Apply for Car Title Loans for Bad Credit
Having a perfect credit score isn’t required to qualify for a title loan. Instead, the following requirements must be met to get approved for the emergency cash assistance you need through an auto title loan:1
- Be of Legal Age to Apply for an Auto Title Loan in Your State of Residence: An applicant must be at least 18 years of age in order to qualify for title loans with bad credit.1
- Have a Vehicle with a Sufficient Amount of Positive Equity: A car, truck, or SUV can be used as collateral for a title loan when it has a qualifying amount of positive equity.1 A vehicle will have positive equity when its market value exceeds the amount that is currently owed on it.
- Be Able to Provide Proof Income: Title lenders will verify your ability to repay the loan during your application. You are required to provide proof of income, but you do not need a 9-5 job to obtain approval for a title loan. Just submit bank statements, pay stubs, or another qualifying document during your application.1
- Have a Qualifying Car Title in Your Name: At the time of your loan request, your vehicle’s title must be in your name and in your possession.1
Apply for auto title loans with bad credit without leaving the comfort of your home – just use your smartphone or computer to get started! Take a closer look at the three basic steps to apply for online title loans serviced by LoanMart:1 3
Go Online or Call a Title Loan Agent
You can conveniently begin your application for a car title loan with bad credit serviced by LoanMart online or over the phone by dialing 855-422-7412. Complete the prequalification form online to receive an instant title loan quote with no obligation!1 3
Upload the Necessary Documents Online
After you complete the online questionnaire, a title loan agent will reach out and ask you to submit the necessary documents if you are prequalified. The application process can potentially move a little faster if you gather the paperwork in advance! These documents typically include proof of address and income, a valid, government-issued photo ID card, recent pictures of your vehicle, and a car title in your name. Depending on your state of residence, you may be asked to provide additional paperwork.3
Find Out if You Qualify for Title Loans with Bad Credit
Once your documents have been received and reviewed, the final step of the title loan application process is finding out if you are eligible for quick funding! Upon final approval, you can choose how to get your money and sign your electronic loan agreement. With LoanMart, qualified borrowers can select direct deposit during this step to get their title loan funding in as little as one business day.1 3
Risk and Benefits of Auto Title Loans with Bad Credit
Like many other loan options, title loans have both disadvantages and advantages to consider before you submit an application. Armed with the right information, you can make an informed decision before you apply for a bad credit title loan.
Disadvantages of an Auto Title Loan
One of the potential disadvantages that you can run into with a vehicle-secured loan is repossession. Pledging your vehicle’s title as collateral for a title loan makes the application process a lot more flexible as a subprime borrower, but failure to repay the loan can result in the lender seizing your vehicle. Additionally, if you default on your loan and your title loan lender reports your payment behavior to the major credit bureaus (Experian, TransUnion, Equifax), your credit score might take a hit.
Advantages of an Auto Title Loan
A brighter side to an auto title loan are the benefits! Title loans can cater to bad credit borrowers and provide a path to emergency funding during tough situations. You are allowed to keep driving your vehicle while paying off your loan, and the application process is fast, flexible, and convenient. There is no store visit required to find out if you qualify for quick financial assistance!1 3
If you have a bad credit score, you are not alone. While the average credit score in the United States is 698, many Americans may have credit scores lower than 579. A bad credit title loan is an option to access fast funding and get back on your feet. With a title loan serviced by LoanMart, you can spend your loan proceeds how you see fit after final approval. Whether you need to pay for a large expense or catch up on your bills, a title loan can be a lifeline.1
Responsibly Borrow Title Loans for Bad Credit
Understanding the potential risks and benefits of title loans is one thing, but responsibly borrowing is another. As a borrower, it is imperative that you stay on top of your title loan payments and borrow only as much as you can pay back. Make sure to prioritize your title loan and only borrow what fits your budget!
Take a closer look at these tips to responsibly borrow money through a title loan with bad credit:1
- Managing the repayment process for title loans for bad credit: The most important aspect of borrowing money through a title loan is your game plan for the repayment process. You should be prepared to create an effective budget that includes the anticipated monthly title loan payments.
- Understanding interest rates for title loans for bad credit: Another important aspect of your loan is the interest rate. On top of paying the principal amount back when you borrow money through a title loan, you will be required to pay interest on the loan. With LoanMart, qualified borrowers can access competitive interest rates!1
- Work on improving your credit score: Even though it is possible to qualify for title loans with bad credit, your focus should be on improving your credit score. Your first step should be to ensure that you are paying your bills on time, as your payment history will make up around 35% of how your score is calculated. If you default on a loan or consistently forget to pay your bills, that can hurt your credit score. One of the easiest ways to boost your credit score is by reducing the amount of debt that you have accumulated. If you have a high balance on your credit cards, you should make it a priority to either transfer some of your balance to a new card to lower your credit utilization or pay them off completely! Be sure to check your credit reports regularly to detect and dispute any errors that could be affecting your credit score. You can visit AnnualCreditReport.com to stay on top of your credit reports!
- Alternatives to consider for title loans for bad credit: Before submitting an application for a bad credit title loan, try asking your friends or family for a loan. Depending on how much you need, they may be willing to help you out, and asking someone close to you instead of relying on a financial institution can help you avoid paying money in interest. Keep in mind that involving money in a relationship can change its dynamic, so only ask your loved ones for money if you can pay them back.
FAQs about Bad Credit Title Loans
Getting money with bad credit is possible through a title loan. If you are thinking about applying for title loans with poor credit, take a closer look at the frequently asked questions below:1
How much money can I get from a title loan with bad credit?
The primary factors that affect your eligibility for a title loan are your income and the value of your vehicle. These characteristics, along with your state of residence, can also impact your total loan amount, but you may be able to qualify for up to $15,000 through a bad credit title loan!1
Do I need a newer car to apply for a title loan with poor credit?
No. As long as your vehicle has enough positive equity to qualify as collateral for the loan, you can apply for a title loan with a new car or an older car.1
Where can I borrow money with bad credit?
Applying for a title loan serviced by LoanMart does not involve getting in your car and taking a trip to the store. Instead, start your application for fast money by completing a prequalification form online or calling 855-422-7412!1
