Car title loans are a possible loan option when you need emergency cash quickly. However, many people find themselves hesitating to obtain one due to the fear of falling for scams. While car title loan scams are a possibility, you can easily learn to spot red flags and avoid falling prey to a scam artist.
How to Avoid Car Title Loan Scams
Scam artists are constantly trying to obtain financial information from unsuspecting people. But luckily, there are plenty of red flags for you to be wary of. So if you are looking for a loan online, keep an eye out for these telltale signs of car title loan scams.
Down Payments or Processing Fees
If you find a car title loan option online that offers incredible deals, you may decide to inquire. If a title loan agent informs you that you need to make a down payment or pay a fee to complete the approval process, know that this is a major red flag. Legitimate car title loan options will not charge you a fee simply for inquiring.
Asking for Suspicious Details
The car title loan process involves your personal information. But if you inquire for a car title loan and an agent also asks for the information of your friends and family, know that that is a red flag. A legitimate car title loan agent does not need anyone else’s information aside from yours, unless you apply with a cosigner.
Receiving Fast Approval
If you inquire for a car title loan, and an agent fully approves you without having seen your information or asking questions, then you should be wary. While some car title loan options do provide preapproval estimates, that is vastly different from outright stating you are approved and guaranteed a certain amount.
Inquire for a Car Title Loan and Avoid Scams
Car title loans offer eligible borrowers quick emergency money with affordable terms. If you want to avoid car title loan scams, all you have to do is perform online research to check the legitimacy of the car title loan business you intend to work with. Check out the website, read reviews, and call for more information.
Once you find a legitimate car title loan deal, you can inquire to start the process. The inquiry process will typically involve answering a few questions about your car, such as the:
- Vehicle Year
Using this information, a car title loan agent will determine the value of your car. If your car has enough value, you may be preapproved for funding and offered an estimate. This estimate is how much money you could possibly obtain with a car title loan once you are fully approved.
Documents Needed for a Car Title Loan
If you are preapproved for a car title loan, an agent will reach out and ask that you submit a few documents in order to verify your identity, address, and income.
Generally, you will be asked to show these documents:
- Car Title – To obtain a car title loan, you will need to have a car title in your name. If you received a car from a family member or a friend, but the car title does not have your name, you need to do a title transfer at your local DMV.
- Photos of the Car – When you inquire for a car title loan online, you don’t have to do an in-person vehicle inspection. Instead, you could just show photos of your car to demonstrate the current condition.
- Proof of Income – Income is important for the car title loan inquiry process. To gain approval, you must show proof that you have a reliable source of income through paycheck stubs, bank statements, invoices, Social Security benefit statements, etc.
- Proof of Residence – To show proof of residence, you can show a rental agreement, house deed, utility bill, voter registration card, credit card statements, etc.
- References – A car title loan agent will request references. You can usually choose to submit either professional or personal references.
Get Emergency Money and Avoid Car Title Loan Scams
Car title loans may offer qualified borrowers quick funding, affordable terms, and flexible qualification requirements.1 If you’re scared of car title loan scams, don’t let that stop you from applying for the financial support you need!
While car title loan scams are a real possibility, know you can easily take steps to avoid falling prey to a scam artist. Conducting thorough research is one of the best ways to spot red flags and avoid car title loans.