Table of Contents
- What is an Auto Title Loan?
- Reasons To Get A Loan Using Your Car
- Auto Pawn vs. Car Title Loans
- How Difficult is it to Get a Title Loan?
- How Cell Phones Changed the Way People Get Title Loans
- What are the Benefits of Auto Title Loans?
- How Are Title Loans Obtained?
- What are Common Title Loan Scams?
- How Much Can I Borrow for an Auto Title Loan?
- Does My Car Need to Be Paid Off?
- How Much is Owed when Title Loans are Required to be Paid Back?
- Do I Need to Have a Job?
- Using a Matricula to get a Car Title Loan
- How Much Do I Need?
- How Long Should I Borrow For?
- How Will I Repay My Loan?
- Can You Get a Cash Advance on a Title Loan?
- Hidden Fees on a Car Title Loan
- What is Amortization?
- What are the Benefits of Amortization?
- What is a prepayment penalty?
- Once I get approved, how do I get my money?
- Can You Sell a Car with a Title Loan on It?
- Loans after Bankruptcy
- The Risks of Getting Title Loans
- Turn in Paperwork to Have Title Loans
We want our customers to understand exactly what they are getting when they choose to borrow money with an Auto Title Loan. In an effort to educate our customers, we’ve compiled a list of frequently asked questions regarding Auto Title Loans.
What is an Auto Title Loan?
What is a title loan? A title loan is a way to use your vehicle’s title to borrow money in a quick, efficient fashion. You are using the money you have already put into your car to secure your loan, so you can GET YOUR MONEY FAST.
When you get a title loan, you can receive your funding as fast as one business day3, that’s the kind of quick efficiency we’re talking about.
But it’s good to be aware of all the facts. To understand what a title loan is you need to know all the names they can go by. There are many names that also mean “title loan,” these names include:
- Pink slip loan
- Auto title loan
- Auto equity loan
- Car title loan
- Title loan with bad credit
- Automobile title loan
- Car equity loan
- Cash for car title loan
- Auto collateral loan
Yup, all those names mean the same thing!
But how do you get a title loan? Are they easy to get? What kind of credit do you need? Don’t worry, we’ve got the answers to your questions right here.
Reasons To Get A Loan Using Your Car
There are many situations in life where you may need to take out a loan. When considering the available options, getting the financial support you need may seem like a challenge. Working with a bank can lead to complex requirements and highly specific paperwork that add to the confusion, leaving you feeling like there may not be a solution out there for you.
Life can present many situations in which you can find yourself needing cash fast. Illness or changes in employment are just some ways that unexpected circumstances can influence you and your family. No matter the emergency, we understand that you may be seeking out a loan or alternative funding in a hurry.
Typical reasons why people need a car title loan (and this is not the entire list!):
- You’re short on cash
- You need a lawyer or bail money for a friend or yourself
- A loved one just passed away and you need money for the funeral
- You are behind on your rent or bills and want to catch up
- You just had a medical emergency
- Dental! You need cash right now for a dentist
- Emergency pet care
- Home repairs
- You get a large tax bill and need the money fast
- … and more
Regardless of the circumstances, you may be eligible to get a car title loan. Bank loans and other types of funding can take days or even weeks to take effect, making the process of getting the help you need stressful. If you do not have a bank account it can be especially difficult to secure financing through traditional programs or services. When you need cash fast, getting a car title loan can be the best and most effective way, with many approvals taking place within one business day3.
Auto Pawn vs. Car Title Loans
Auto pawn loans and Car Title Loans are very similar in some ways and completely different in others. Both are short-term solutions for consumers that need access to funds, but only one allows a customer to keep driving their car while paying back the loan.
An auto pawn loan is obtained when a vehicle is taken to a pawn shop and left there until the loan is paid back. Customers lose a valuable transportation method when choosing this borrowing option.
Car Title Loans allow customers to keep driving their car even as they access the equity they’ve invested in it. With Auto Title Loans, customers provide the title to us until the loan is paid off. As monthly payments are made, the owner of the car can keep driving, and once the loan is paid in full the car is theirs again.
How Difficult is it to Get a Title Loan?
We know that life can throw some expensive surprises at you, and it’s not always easy to come up with thousands of dollars on the drop of a hat. But you can be funded with the financial assistance you need as soon as the next business day3!
Also, don’t stress if you have less than perfect credit. Most lenders judge you on your credit score, like it determines the kind of person you are! We think that’s ridiculous. All types of credit are encouraged to apply for a title loan.
How Cell Phones Changed the Way People Get Title Loans
With today’s innovations, we have access to anything and everything at the tips of our fingers – thanks to our smartphones. So, how, if at all, have cell phones changed the way people get title loans? With resources becoming more accessible with unrestrained internet access, cell phones have made getting a title loan so much easier and less stressful.
Online Applications and Resources
Now that cell phones are equipped with internet access, you can access title loans from anywhere: your home, your grocery store, your car, or on vacation. You can apply on your phone’s browser, or with the Mobile App. You can just take pictures with your cell phone of your documents and send them through our system.
Now that we have a mobile app, applying for a car title loan is quick, convenient, and easy. We have also included a FAQ section on our app if you want to search for answers to questions you may have.
Collecting Your Funds
Did you know you can use your smart phone to collect your funds without ever having to visit a bank?
Qualified borrowers can choose to have their money directly deposited into their bank account.1 You could see your funds in your account in as little as one business day3!
What are the Benefits of Auto Title Loans?
Auto Title Loans allow you to gain access to funds without selling your automobile. There is no minimum credit score required for an Auto Title Loan, meaning it is often faster and easier to be approved as opposed to a traditional bank loan.
How Are Title Loans Obtained?
Title loans offer flexible qualification requirements for borrowers, which allows individuals with low or unestablished credit to confidently inquire. There are two main qualifying factors, including the car and the ability to repay the loan.
Title loans are typically flexible with the types of cars that are accepted as collateral. As long as the car has enough equity, it may be deemed eligible for collateral. One quick and easy way to check if the car has enough value is to use an online title loan calculator.
Income is also very important for title loan eligibility. As long as the potential borrower receives consistent income and the loan can be paid back without difficulty, they may qualify.
What are Common Title Loan Scams?
Financial emergencies come unannounced, leaving you frustrated. That doesn’t mean you have to settle. Common title loan scams include terms that charge undisclosed interest, do not allow early prepayment, or require you to pawn your vehicle. The biggest scam of recent is companies that require you to send them money in order for them to process your loan. Beware!
We want to help you out, not compound the problem. Do you have a vehicle? Great! You could be eligible to get the help you need in as little as one business day1, 3.
How Much Can I Borrow for an Auto Title Loan?
The amount you can borrow is based on your state’s laws, how much equity you have in your automobile and the amounts you are able to pay during the repayment phase. Once you’ve completed your application, we’ll look closely and determine how much you are eligible to borrow. Or, go online to check out the new payment slider that allows you to decide how much you’d like to borrow. We even display the total monthly payment up front. See how much you can get today?
Does My Car Need to Be Paid Off?
Even if you have a few payments left on your original auto loan, we may be able to help you access the equity in your automobile. If you are approved and have enough equity in your automobile, we may be able to pay off your existing loan and give you access to the funds you need.
How Much is Owed when Title Loans are Required to be Paid Back?
The amount you owe when your title loan needs to be paid back is dependent on your income, how much you borrowed, and how long you have for repayment.
However, you should know that title loan payments are typically affordable for qualified borrowers. When a title loan is paid back, you are not left with pennies in your pocket. A lot of loan options require large monthly payments because collateral is not used. With secure title loans, the use of collateral could allow you to reap extra benefits such as lower payments.
Do I Need to Have a Job?
A job is not a requirement with a Auto Title Loan, but we do require some type of proof that you will be able to make your monthly payments. We ask that you are able to demonstrate some type of monthly income.
Using a Matricula to get a Car Title Loan
While some have driver’s licenses, passports or other government-issued identification documents, you can use a Matricula ID when those are not available. We understand that financial emergencies can strike at any time. When it does, getting a car title loan is the quick and easy way to get the cash that you need, while keeping your vehicle1.
Mexican nationals living in the United States without a social security number can access many banking and financial services today by using a Matricula. Car title loans provide numerous advantages which are worth considering.
How Much Do I Need?
Consider how much money is needed. Although we try to help our customers secure a car title loan that will cover all their financial needs, there is a limit to how much we can let individuals borrow.
We want to encourage everyone to be financially responsible, and that means not borrowing more than the individual can repay. We also make sure that the value of the car is equal to or greater than the loan they are taking against it, since the auto will be used as collateral.
Also borrowers should know the approximate market value of their car before looking for a title loan online. How much is car worth will determine how much we can reasonably lend.
How Long Should I Borrow For?
What a customer needs money for will play a role in determining how long the loan term should be. But borrowers should also be aware that they would be paying interest on the loan for as long as they have it. The longer the loan is held, the more in interest that is accrued.
How Will I Repay My Loan?
Again, we want to make sure our customers can reasonably repay any car title loans they take out. For this reason we ask borrowers to think about how they will repay the loan before they apply for one.
Part of what will determine whether or not the borrower will qualify for a car title loan is their gross monthly income. We need to see that they will be able to make payments.
Borrowers should budget carefully and cut back in some areas while repaying the title loan.
If customers do have trouble repaying their loan, they should contact us. We do try to work with our customers who reach out and ask for help.
Can You Get a Cash Advance on a Title Loan?
Being in a poor financial state is never something anyone plans to aspire to. When you find yourself in a poor financial situation, you want to get relief, fast. Sometimes these situations require some cold, hard cash. In this day in age, cash is still king. A cash advance allows you to get cash by signing a postdated check with the total loan amount plus fees to a lender. The interest rates on a cash advance and fees on a cash advance may make it difficult to repay your unsecured personal loan over time. The only advantage being that you get cash, fast. But what if you want a secured loan that isn’t littered with fees, and has longer repayment terms?
Hidden Fees on a Car Title Loan
You know that borrowing money comes at a cost, but what are all of the line items that make up the total? Your interest rate isn’t the only thing you’ll pay for. If you don’t understand your loan clearly, you could end up getting hit by extra charges and penalties.
So, here are some common hidden fees to look for when shopping around for loans:
- Insurance fees
- Late penalties
- Balloon payments
- Prepayment fees
- Transaction fees
- Credit card convenience fees
- Credit report fees
- Appraisal fees
- Cost of your interest rate structure
- Origination fee
A predatory lender may want to make a killing out of you with fees. This may start as early as when initially requesting the loan quote. One common scam involves charging at each stage of the loan application process. There may be hidden expenses that are not brought to your attention too.
We believe it should not cost anything to find out how much you are eligible for. That’s why we don’t charge any processing fees when you are just getting started and all charges are clearly disclosed before you sign up.
A good lender should make information available online at no cost.
APR: True Cost of a Loan
The best way to uncover any hidden costs is to go through everything that makes up your APR. The Annual Percentage Rate, also known as APR, is a rate that is charged annually to anyone that borrows money. Any loan, like an auto title loan, credit card or mortgage will have an APR, expressed as a percentage. This number includes any additional costs or fees that are included in each transaction over the span of a year. So, APR refers to the yearly cost of borrowing money over the entire term of the loan.
APR is used as a way to provide a total number that can be compared to determine which loan option is best for your situation. There are often hidden fees and changing rates that are written into the fine print of any loan so you have to be careful who you decide to work with. This is why you should always negotiate and compare details about a loan’s APR, not just the interest rates, when shopping around.
Annual percentage rates and interest can be confusing, that is why by law, your APR must be clearly explained by lenders and credit card companies before you sign any documents to borrow money. The best way to calculate your APR is to have your lender lay out the math for you. But, even though a lender will explain the numbers, they still might include hidden extras.
To help you catch these, look for these things in your APR.
If you miss a deadline, late payment penalties are something that you’ll face no matter what company you’re working with. And while you should never plan on making late payments, it happens to the best of us. When going through a loan package, make sure you check how much paying late will cost you, just in case.
No, not that kind of balloon. This is one of the worst loan tricks in the book that you could get hit with. A balloon payment is a large payment due at the end of a loan. A balloon loan typically features a relatively short term, and only a portion of the loan’s principal balance is amortized over the entire term. But at the end of the loan term, the remaining balance is due as a large final repayment. This is where it gets its name, because the final payment balloons in comparison to the other payments. Balloon payments tend to be at least double the amount of the loan’s other payments, but it can end up costing thousands of dollars.
You should always walk away from a lender that penalizes its customers for making early payments or for paying off their loan before the scheduled date. This is not only one of the most unfair hidden costs, but it’s also a red flag signifying that the lender does not care about your financial success.
A lender might not always hide “hidden” fees. This is usually the case with loan insurance charges. Sometimes these types of add-ons are necessary for your own protection with your loan, other times they’re not. Loan insurance is sold just in case something happens to a borrower that might make them unable to pay the loan in the future. If you really see major risk to your health or job in the future, you might want to consider this option and factor it into your budget. But, if you know your health and employment situations are stable enough, you might want to drop the add-on premium.
Transaction Fees / Convenience Fees
Ask about a lender’s payment methods and if paying with a card will have convenience fees attached. If you plan on paying with a card, make sure you factor this into what you’re allotting for monthly payments in your budget. Or, consider using an alternate payment method to avoid this additional cost entirely.
Credit Report Fees
Some lenders can charge you just for running a credit check on you during the loan application or processing stages.
This is more common with mortgages where a house has to be appraised, but make to watch out for if a car title loan lender is trying to charge you for inspecting and valuing your car.
Interest Rate Structure
This is the most complicated cost that goes into your loan because there are many different interest rate structures, some more expensive than others. There is a lot we could explain about interest rate structures, but here are the main things you need to know:
In a normal loan, interest will be added every day at the agreed rate. When paying off your balance, you only pay back the balance of the loan plus any interest to date that has grown since your last payment. But, with pre-computed interest, the total amount of interest that you would pay during the entire term of the loan is calculated and added automatically to the balance up front. This gives you no incentive to pay off your balance early because you’d still have to pay the same amount of interest no matter what. This kind of works like a sneakier prepayment penalty.
This is known as “interest on interest,” and is very common with loans. Exponential growth is created by compounding interest and is the main reason your monthly interest rate and APR are different. Basically, all you need to know is that looking at a loan’s APR is important to give you the best picture on how much your interest structure will cost.
A lot of lenders will charge some kind of origination fee. After all, there is a lot of work that goes into valuing your car, calculating your loan terms, underwriting the paperwork and the customer service along the way. Just make sure you know what the origination fee is and how you would be paying for it. Know if it’s going to be deducted from your loan amount, added to your monthly payments, etc.
What is Amortization?
Simply put, amortization is the paying off of debt over a period of time in regular installments. Payment amounts are determined before the money is loaned so the borrower can see exactly how much they’ll be paying over the life of the loan.
Some loan companies may seem too good to be true, and may charge hidden fees or balloon payments. We always want to be transparent and honest with our customers so they know what they can expect from us.
What are the Benefits of Amortization?
The most obvious benefit of amortization is the fact that borrowers can see right up front exactly how much it will cost them to borrow money if they are approved. Before any paperwork is signed, an agent can assist in adding up all monthly payments to determine the exact cost of borrowing money.
What is a prepayment penalty?
When it comes to title loans, some lenders may penalize you for paying off your loan earlier than expected. Any loan with a term that goes beyond 30 days may come with a prepayment penalty. That means that if you come into more money and decide to pay off your loan a couple of months early, you will certainly be penalized. This is a common title loan scam.
We work with you on the interest rates and the terms of the loan to ensure that your opinion is considered when making these key decisions. We also do not penalize our customers for making early payments.
Once I get approved, how do I get my money?
We also offer several ways for you to get paid! Some of the ways you can get your money include:
- In Person
- Automatic Electronic Deposit to your bank account
Once you qualify for a title loan, you could expect to receive money in as little as 24 hours.³ The only limitation on how you get your money is how you choose to receive it.
You shouldn’t have to wait for your money when you are in a financial crisis. You shouldn’t have to wait around all week to see if you are approved for a loan, because that is time and money wasted while waiting for financial relief. Once you have had time to recollect yourself and take care of your business, you can begin to move forward and develop a better monetary state.
Can You Sell a Car with a Title Loan on It?
It’s not a simple process, but you can sell a car with a title loan still on it. Whether you plan on using the money from your sale or you plan on finishing the pay off while it’s up for sale, you will have to know interested buyers that you are finishing paying off the title loan.
While you have a car title loan, there is a lien placed on your car title. What this means is that the car’s title technically belongs to the lender you have the car title loan with. You use your car title as collateral for the loan, which means you are paying off a hold they have over your loan. Until that loan is paid off, the lien will not be released, and the car will not be yours to “give away”.
Transferring the Car Title with a Car Title Loan
Unfortunately, you will not be able to officially transfer the title of the car to the name of the new owner until the car title loan is paid off. When you submit the title change through the state, they will be notified of any liens or holds on the car, so they can stop any transfers that may happen.
If you plan on using the money you receive for the car to pay off your car title loan, you’ll have to discuss that with your buyer. If it’s a friend or family member, they may be more open to waiting for their title transfer if they know you have to pay off the loan. Other people who see your car advertised may not be as flexible.
Many people want to be able to pay for the car and instantly receive the title change in their name. If you have a car title loan on the car and need to pay it off with the money they give you, you should let them know before the sale. In the end, it might make it difficult to sell your car that way.
How to Sell Your Car When You Have a Car Title Loan
It may be easier to sell a car that has a title loan by paying off the car title loan first. This will make the process of selling your car a lot easier because there are no concerns that will scare the buyer.
Once you’ve paid off the title loan, you’ll be able to sell your car without any concerns about who owns the title. You will own it again, so you’ll be able to transfer it to a buyer. After the loan is paid, you can list the car for how much the loan was worth to get your money back or a little more if you want to make a profit off of your car.
Loans after Bankruptcy
Declaring bankruptcy may help settle your debt and stop phone calls and letters from debt collectors. Whether you file for Chapter 7 or 13 bankruptcy, this last resort option may help you get a fresh start. But, it’s a fresh start that comes with a lot of consequences. One of the biggest is trying to apply for loans after you have declared bankruptcy.
Whether you file Chapter 7 to discharge debts, or filed for Chapter 13 to use a 3-5 year plan to pay off your debts, the fact that you filed for bankruptcy can affect you long after your debts have been actually paid.
The bankruptcy laws and codes were originally set up to give people with debt a second chance, not to punish them. However, there’s a cost to everything. In this case, bankruptcy carries some long-term consequences because it will remain on your credit report for 7-10 years after filing no matter what. When your credit report has the equivalent of a big, red “bankruptcy” stamped over it, it can be very hard to get loans or be approved for any line of credit no matter your current financial situation.
But we offer an alternative to these traditional lenders that will probably turn you down as soon as they see the word bankruptcy.
How We Look at Bankruptcy
A previous bankruptcy or bad credit history may not hurt your chances of qualifying for an auto title loan, since our auto title loans and many other places are more heavily based on the value of your vehicle and your ability to repay.
If you have a current bankruptcy proceeding, you may need to get permission from the court to obtain a loan from us.
We will decide if we can lend you money based on your ability to make payments now. With respect to bankruptcy, we look to see if you are in credit counseling, have an active bankruptcy or anything else that might affect your ability to pay a loan.
We’ve been able to help people with all kinds of situations in the past that have to do with bankruptcies and we may be able to help you too.
How We Look at Credit
Similarly, your credit score might be badly affected by a past bankruptcy whether it’s still on your report or not. We also have solutions for loans for those with bad credit, due to a bankruptcy or otherwise. Unlike other types of loans, credit is not a major deciding factor for us when we’re making loan approval decisions.
The Risks of Getting Title Loans
What is Defaulting on a Car Title Loan?
When you have a car title loan, most lenders make you repay the loan every month. If you start to miss your monthly payments and continue to miss them without any communication to your lender, the delinquency can result in car title loan default. A car title loan default is the failure to repay a loan according to the terms agreed upon in your contract.
Other lenders make themselves unavailable or not understanding. We may be able to adjust payments with customers to fit their lifestyle, circumstances, and budget.
How Many Title Loan Payments Are Missed to Default?
Rules regarding defaulting and repossession can vary depending on the state you live in. Most contracts with lenders will say when the missed payments are considered defaulting, and how long the borrower has to contact the lender before they repossess the vehicle.
We don’t want you to have to handle the stress that comes with defaulting on a loan, so we make sure to be in contact with you when you have missed a payment.
What Happens When You Default on Car Title Loans?
Because you are using your vehicle’s title as collateral for your car title loan, a lender is permitted to seize the vehicle at any time without notice, which could possible mean coming onto the borrower’s property to do so. The lender then repossesses the vehicle, typically taking it to a tow site.
With some lenders, you may be able to get the money you owe to the lender before they repossess the vehicle, but after the car title loan has defaulted. Some lenders may even send a notice of repossession to give you the chance to pay off the loan.
The last thing we want to ever happen to you is for your car to be repossessed because of a default on your car title loan. Our customer representatives are available to answer your calls 7 days a week. While some people may feel afraid to talk with their lender when they are close to defaulting, we encourage you to contact us to make arrangements.
What Happens if Your Car is Repossessed?
Once the borrower’s vehicle has been repossessed, the car title loan lender can choose to sell the car at an auction. Any of the money that they acquire from the auction will go towards the remaining balance of the loan. If the auction gives more money than the loan is worth, the lender has to give the remaining money from the loan difference back to the borrower that defaulted on the loan. If there is any property within the vehicle, the lender must return it to the borrower.
We believe it is more beneficial for both customer and company for the life of the loan to be completed without any problems. We encourage calls from our customers who are struggling with payments, or from customers of other lenders who want a better service.
Turn in Paperwork to Have Title Loans
To get title loans wired to your account, your identity and information must be verified by a title loan agent. To start the process, you will be asked to turn in some paperwork online.
Proof of Identification
To prove you are who you say you are, you will have to show a government-issued photo ID. You can choose to show a state ID, driver’s license, passport, etc.
Having a car title in your name proves that the car legally belongs to you. If the car is not in your name, you cannot get a title loan until you get a title transfer at your local DMV. A loan agent could help guide you through this step.
Proof of Residence
Proof of residence is required to confirm you are allowed to get title loans in your state. To prove you live at your current address, you can show a lease agreement, phone bill, utility bill, pay stubs, etc.
Proof of Income
To obtain title loans you have to earn enough reliable income so that your monthly payments are not late or burdensome on your budget. To show proof of your current income, you can show pay stubs, bank statements, a workers compensation letter, Social Security benefit statements, etc.
References are requested so that title loan agents can get to know you a little better. You can choose to submit professional or personal references.
If you’re trying to sell your car because you can no longer afford your car title loan with another lender, consider refinancing to lower your monthly payments. We offer some of the most competitive interest rates in the title loan industry which give our customers lower monthly payments. Our customer service ensures that you’ll get wonderful service. Our representatives work to make sure your loan works for your lifestyle and fits into your budget.
- Apply online. We have qualified representatives available 7 days a week with extended hours, because we know you may need help at ANY time, even on the weekends.
We have a quick information request for you to fill out, it should only take about 5 minutes to complete, and you’ll know if you are qualified then and there. Don’t waste your time waiting forever on a traditional lender to get back to you.
- Once you’re approved,an experienced representative will chat with you about your quote and some of the details in your loan contract. There are no fees or any obligation to start. Your quote is 100% free, and you choose if you want to proceed with the loan. We don’t want to rope you into anything you aren’t excited about.
Don’t sweat it too much if you can’t find your title, or if your name isn’t on it, we may still be able to help you.
- Get your money! Once we have received your documents it’s time to sign your contract! We will also sign on to your vehicle title, but only as a lienholder. Once you have paid off your loan you can have your title back!
Once you’ve been approved for an auto title loan and you’ve sent in your documents, you’ll have many different options to collect your money including:
- Direct deposit – You can have your funds directly deposited into your bank account or mobile wallet. All you need is a little information about yourself and your bank account number.
- In-Person: You can pick up your money at a participating money transfer location near you.
Your money is yours to do with as you please, we hope you enjoy the financial freedom!
You’ll have access to great service with a customer service team that cares! You can even download our app and make payments from your phone! Call today to see if you can qualify for a car title loan, or start your application now!