Can You Get a Collateral Loan with Bad Credit?
Yes, you can get a collateral loan with bad credit. While you may not be able to qualify for an unsecured loan without a strong credit history, a title loan is a type of secured loan that can be a lot easier to obtain approval for.1
The reason why title loans are so flexible is because the title to your vehicle is the collateral for the loan. That allows the application process to be much more flexible and minimizes the lending risk, so title lenders care less about your credit score and more about the value of your car. So, it is possible to get a title loan with bad credit!1
Usually, title lenders will run a credit check during your application. But, the current amount of equity in your car and your ability to repay the loan are the primary factors they will use to determine your eligibility and loan amount.1
While the average credit score in the United States is 698, many Americans may have credit scores lower than 579. A 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!1 3
What Exactly is Bad Credit?
Credit scores were invented in the 1950s by the Fair Isaac Corporation (now known as FICO). A person is assigned a numerical score based on certain factors, such as payment history, credit mix, and credit utilization. Credit scores are used by lenders to determine your creditworthiness. Generally, creditworthiness measures your ability to handle your debt obligations as well as your ability to take on more debt.
These five different factors affect your credit score:
- Payment History
- Credit Utilization
- Age of Your Credit
- Credit Variety
- New Credit
Credit scores below 580 on the FICO scale are considered to be bad credit scores. A low credit score typically indicates that a person is struggling financially. Bad credit can make it difficult to obtain loan approval, especially if the loan is unsecured. That’s why it can be tough to qualify for traditional loans from a bank or credit union if you do not have a decent credit score.
How Can I Improve My Credit Score?
Take a closer look at these tips to potentially improve your credit score:
- Pay Your Bills on Time: If you want to improve your credit score, you will need to pay your bills on time. If you default on a loan or consistently forget to pay your bills, that can hurt your credit score.
- Reduce Your Credit Card Debt: 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 pay them off.
- Check Your Credit Reports: Check your credit reports regularly for accuracy. Doing so helps you 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!
- Use Your Credit Cards Wisely: Be sure to use your credit cards wisely and only take on debts that you can afford to pay back. Don’t overspend!
What Do I Need to Get Title Loans With Bad Credit?
To apply for title loans with bad credit, you need to meet the initial requirements and submit a few documents to verify your information. Then, you must provide basic details about yourself, your finances, and your vehicle. One of the most significant advantages of an auto title loan serviced by LoanMart is that you don’t need to visit a store to begin your loan inquiry! You can start the application for a title loan anywhere with internet access.1
In order to qualify for title loans with bad credit, you must meet the following initial criteria:1
- Be at Least 18 Years of Age: An applicant must be at least 18 years of age in order to qualify for title loans with bad credit.
- Have a Title to a Qualifying Vehicle or Truck in Your Name: It is possible to apply for title loans with bad credit. But, you must have a vehicle title in your name in order to qualify for online title loans because it is used as collateral for the loan.
- Provide Proof of Your Ability to Repay the Loan: 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 proof of alternative income during your inquiry.1
What Documents Do I Need for Title Loans With Bad Credit?
You can conveniently send the required documents via email or text message to a title loan agent during your loan inquiry.
The following documents will be required during your title loan application:1
- A Valid Government-Issued Photo ID: You must submit a valid, government-issued photo ID card.
- Proof of Address: You can provide proof of address using a piece of official mail, like a rent payment or utility bill.
- Proof of a Title to a Qualifying Vehicle or Truck in Your Name: As mentioned earlier, you must have a vehicle title in your name to apply for a title loan serviced by LoanMart.
- Proof of a Steady or Alternative Income: While you do not need a perfect credit score to apply for a title loan, you are required to provide proof of income during your application. The following alternative sources of income can be used to demonstrate your ability to repay a title loan:1
- Disability Benefits
- Retirement Income
- Workers’ Compensation
- Annuity Payments
- Settlement Income
- Recent Photos of Your Vehicle: A few recent photos of your vehicle are required in order to complete a virtual car inspection with LoanMart. You can easily skip the hassle of driving somewhere to complete a physical car inspection! Just take pictures of all sides of the car, the odometer reading on the dashboard, and the VIN (Vehicle Identification Number).
How Can I Apply for Car Title Loans with Bad Credit?
You can apply for car title loans with bad credit without leaving the comfort of your home – just use your smartphone or computer to get started. No store visit is required, and qualified borrowers may receive funding in as little as one business day. Take a closer look at the three basic steps to apply for title loans with bad credit:1 3
1. Go Online or Call a Title Loan Agent
You can conveniently begin your application for an auto title loan serviced by LoanMart online! The online pre-approval form may only take a few minutes to complete. Or, you can call 855-422-7412 to speak directly with a LoanMart title loan agent.1 3
2. Upload the Necessary Documents Online
After you complete the prequalification form, a title loan agent will ask you to submit the necessary documents. The application process can potentially move a little faster if you gather the paperwork in advance!3
3. Find Out if You Qualify for Title Loans with Bad Credit1
The final step of the title loan application process is finding out if you are eligible for quick funding! With LoanMart, qualified borrowers can choose direct deposit to get their title loan funding in as little as one business day.1
How Much Money Can I Get from a Title Loan with Poor Credit?
The amount of money you can be eligible for through a car title loan will largely depend on your income and the total value of your car. Your ability to repay the loan is also a factor that will influence the amount you can receive through a title loan.1
Take a closer look at the factors that will largely determine the value of your car:
- Make, Model, Year, and Style of the Car: These are all characteristics that can significantly impact the value of your vehicle. Certain makes and models of cars can retain value better than others. Newer models of cars will typically have more resale value than older models, but classic cars can retain a considerable amount of value over the years.
- Car Mileage: Typically, you want a car with a low amount of mileage on the odometer. But it is possible to qualify for a title loan even if you have a car with a lot of miles on it.1
- Overall Condition: A vehicle’s overall condition is one of the biggest factors that will have an impact on its resale value, and it is an important part of the title loan application process. Regular maintenance is the key to keeping a vehicle in good condition. Any damage to your vehicle, whether it is structural or cosmetic, can diminish the value of your car.
- Modifications Made to the Car: Some of the modifications that can potentially decrease the resale value of a vehicle are vinyl wraps, custom paint jobs, and adding an aftermarket exhaust that is too loud. Any modifications made to your car will have the potential to increase or decrease its value.
You can use LoanMart’s online calculator tool to receive an estimate of the current amount of equity in your car and a title loan quote with no obligation.1
Apply for Title Loans With Bad Credit Today
If you need emergency cash to cover an unexpected expense, you can apply for a title loan with bad credit today! The title loan inquiry process can be quick and straightforward – eligible borrowers can obtain approval the same day they apply.1 3