How Are Title Loans Calculated?
Basically, there are a number of factors that come into play when coming up with the total loan amount. The calculations include:
1. Your vehicle with a title that you want to use for an auto title loan. The total amount of money that is loanable to you will largely depend on the market value of the vehicle that you intend to use as collateral. To be clear, the value of the vehicle will be assessed based on its market value and not its retail value – so if you have a three-year-old sedan that was bought at an original price of $4000 but is now at a current market value of $2500, then the assessed loan value would be somewhere closer to the second figure. On your end, you might be able to come up with a ballpark figure of how much money your vehicle would probably fetch by researching on how much it is currently being sold for at the secondhand market. Deduct a couple hundred dollars from your total (to be on the safe side) and you might be close to the figure you can expect to be approved for. You can also get an estimate when you fill out the form on this website.
NOTE: There is a term car title loan companies use called “Loan to Value” or “LTV”.. LoanMart has one of the most liberal LTV’s around and typically beats all other companies on LTV.
2. The laws of the state where you live. Out of the many loan providers out in the country today, LoanMart has certainly proved its status of being one of the best by having established a strong presence across several states in the country. The total loan amount will also be influenced by the laws of the state where you currently reside. At present, LoanMart serves residents who live in Alabama, Arizona, California, Georgia, Illinois, Missouri, New Mexico, South Carolina, and Utah. Each state will have differing laws when it comes to applying for a car title loan, so this factor will also have an influence on the final amount. The good thing about getting one from LoanMart is that for as long as your car has a title from any of those states and you show evidence of your ability to repay your loan, then the possibility of getting the money you need in the next business day3 is higher.
3. Applicable interest rates. To be clear, the interest rates may depend on where you live apart from the agreed upon terms between LoanMart and the loan applicant. If you find this interest rate or monthly payment schedule too high, then you might want to ask for an adjustment on the term. Rest assured, LoanMart works to make the loan terms work in your favor so that the payments will not be too burdensome to you – so always make it a point to ask for the best possible option. Also, keep in mind that the interest rate can also be dependent on whether or not the payments are made on time and can even be significantly reduced the amount you will owe by making a sizable prepayment at any time during the course of the loan term.
4. Your ability to pay the loan. This means showing proof of income from a stable or regular job or evidence of your capacity to pay. If you are self-employed, a copy of your bank account details will also help your chances of getting approved for a higher loan amount.
Tips to Make It Work in Your Favor
Depending on the state where you live, you can ask for a fee schedule to have an idea of the loan amounts and their corresponding interest rates. At the end of the day, LoanMart will be the one to come up with the final figure that will work best for both the company and your own personal needs. On your end, there are a few things that you can do to make it as smooth as possible:
1. Research on vehicle market value. Once you know how much you need to borrow, do a bit of number-crunching yourself so you can have an idea of how much your car title will fetch. If your projected amount comes up short, see where else you can generate the needed balance. You might have another vehicle that you can use the title to make a loan for, too, if needed.
2. Find ways to make more money. Having a temporary side gig to generate funds outside your regular paycheck can certainly help accomplish one of two things: decrease the total amount that you need to loan (since you can make part of the total amount yourself), or shorten the payment period by using that extra money to make extra payments on top of your scheduled monthly ones, which will also translate into smaller interest fees.
3. Weigh your options and ask for assistance. Don’t be afraid to come forward with your current situation to ask for a re-computation that will be more manageable for you! LoanMart’s staff are used to assisting loan applicants in this way, and re-computations to generate smaller interest rates, a longer payment period, or adjustments in the loan amount are all services that are offered as a means of helping.
Having said all that, the idea of how title loans are calculated are now clearer to you – so you can go ahead and start applying for that car title loan today!