Do I Need Good Credit for a Car Title Loan?

Consumers who are looking for a quick cash solution to an urgent financial need often times research if auto title loans could help them out. While doing so, they may wonder if good credit is needed for a title loan. The quick answer is no! Most title loan options do not require that applicants have good credit!¹ While title loans may still come with certain credit requirements, and approval cannot be guaranteed before you apply, you usually don’t need good credit to qualify.¹

With car title loans serviced by LoanMart, credit doesn’t have to stand in your way when you need cash fast. If you have a car title, you can apply for a car title loan today and see what your car qualifies for.¹

Why Good Credit is Usually Not Required for Title Loans

Car title loans are not only know for being quick, but they are also known for not requiring perfect credit. If you use your vehicle title to get a car title loan, good credit is usually not required for the following reasons:

• Vehicle collateral: Using your car as collateral to get a loan lowers the risk to the lender. Therefore, car title lenders can put less emphasis on an applicant’s credit, and focus more on the value and equity of the vehicle.
• Loan amounts: Car title loans tend to have relatively modest loan amounts, ranging from a few hundred dollars to a few thousand dollars. Compared to some other loan options such as prime personal loans or mortgages, the overall risk of a single loan is therefore more lower to the lender.
• Rates and fees: Auto title loans are not a cheap borrowing option. While typically lower than the rates and fees for payday loans, car title loans tend to come with interest rates and fees that are significantly higher than bank loans, credit union loans or credit cards. These higher rates and fees allow auto title loan providers to offer credit to a much broader range of applicants.
• Auto title lenders specialize in bad credit lending: Lending, like many other areas of business, has become specialized. Banks and credit unions tend to focus on customers with good credit, while other lenders, servicers and fintech platform may concentrate on applicants with bad credit. Title loan providers are focused on providing credit to applicants who don’t have good credit. Over time, this allows title lenders to better understand and predict the payment behavior of borrowers who don’t have good credit, and approve applicants that other lenders don’t.¹
• Some lenders don’t even check credit: If you are concerned that your credit score stands in your way of getting a loan, you may look for a title loan without credit check. While title loans serviced by LoanMart usually require a credit pull, you may find some providers that won’t check your credit and therefore certainly don’t have a requirement for good credit.

What Are the Credit Requirements for Title Loans serviced by LoanMart?

While some title loan lenders don’t even bother to pull a credit report, title loans serviced by LoanMart may come with some basic credit requirements, depending on your state of residence and specific circumstances. Having good credit is not part of them however.

The specific requirements can change from time to time, but they generally include the following:

• Agreement to a credit pull: Auto title loans serviced by LoanMart require a credit pull. While the credit score is not the primary concern, a credit pull is required to qualify. If the applicant does not agree to have their credit bureau accessed, the loan officer will of course honor that and not proceed with the application.
• Credit report accessible: The applicant’s credit report must be accessible. That means if there are any current credit bureau alerts such as a fraud alert, the alert must be resolved. This is primarily for the applicants’ safety, and also a legal requirement whenever a loan process includes a credit bureau pull.
• No active bankruptcy: Applicants with prior bankruptcies may qualify for auto title loans serviced by LoanMart, but loan applicants who have an active bankruptcy listed on their credit bureau will not be eligible for a title loan serviced by LoanMart, unless they can prove that the bankruptcy proceedings have been completed.
• No prior default on a title loan serviced by LoanMart: If you have previously had a title loan serviced by LoanMart, you may not qualify for another title loan if you’ve defaulted on your prior loan.¹

Advantages of Car Title Loans serviced by LoanMart for Applicants Who Don’t Have Good Credit

Title loans can be an attractive option for applicants who don’t have good credit. While every borrower’s circumstances differ, here are some of the key advantages they can provide:

• You don’t have to worry about having good credit. If you have a car title, then you may be eligible for a car title loan.¹
• As a servicer of title loans, LoanMart reports title loan payments to a credit burau. Borrowers who make their title loan payments on time and eventually pay off their loan can therefore use a title loan serviced by LoanMart to build or re-build their credit.
• You can get a title loan for a car that is not yet fully paid off. Car title loans serviced by LoanMart are possible even if you have a few loan payments remaining on your car.¹
• Title loans serviced by LoanMart are not only flexible as far as the credit requirements are concerned. The vehicle collateral requirements are similarly flexible. As long are your car or truck meets the minimum equity requirement, you can qualify for a title loan even with an old car , car with high mileage, or a vintage or classic car.

Conclusion

Auto title loans, including those serviced by LoanMart, are available without good credit.¹ Title loan providers specialize in lending to borrowers with prior or current credit issues, and the use of the vehicle as collateral lowers the lending risk. Moreover, title loan interest rates and fees compensate the lenders for the higher default risk associated with bad credit loan options.

Car title loans serviced by LoanMart come with some basic credit requirements but still offer a high degree of flexibility. Apply online to see what your car qualifies for!¹