If you’re strapped for cash and have an emergency, a title loan may be one of your best options at the time. Title loans have gotten a black eye in the world of finance, but they can truly help you out. After all, more than 2 million people in the United States use them.
To learn more about title loan requirements, keep reading.
How to Get a Title Loan
A title loan is a loan where you use the title of a paid-for vehicle as collateral. Title loan companies are a great option if you have bad credit from poor financial decisions in the past. Most title companies do not run credit checks and will accept clients with bad credit.
This means that to get a title loan, you usually need to just fill out paperwork and produce the title of your car.
Title Loan Requirements
Because of their leniency, most title loan companies have few requirements. They often require you to be a U.S. citizen or at least a permanent resident. You also typically need to be 18 or older and have a regular source of income.
All of these things make you a good risk. The company is hopeful they will receive the money that they lend you.
Because your title acts as the collateral for the loan, rarely can you find title loans that don’t require the car. Essentially, you will not need to show the company the car, but you will need to produce the title of the car to obtain the loan.
Once you have secured a loan and handed over your title, the title loan company owns your car since they possess the title. As soon as you pay off your loan, the company gives you the title back, and you walk away with your car.
Can You Get a Title Loan on a Refinanced Car?
To obtain a title loan, you must have a clear title, meaning that you must own your car. You cannot get a title loan on a refinanced car. If you have paid off your car loan and own your car, you can use it as collateral for this loan.
If you purchased the car from a neighbor with a handshake deal but still do not have the title, then you may not use the car as collateral. You need to have a free, clear title with no strings attached.
Getting Out of the Loan
You may be wondering how to get out of a title loan without losing your car. If you default on your title loan, the title loan company will repossess your car. You do have options that can prevent this, though.
First and foremost, make a plan on how to pay back the debt, and then stick to the plan. This is your best bet for not losing your car.
If something else happens that prevents you from paying back the title loan company, you can always seek out a second loan from a different company to pay them off. You can also take some time to visit the lender and attempt to negotiate.
Many title loan companies pride themselves on their flexibility, so negotiating may just work.
Know the Requirements
Understanding title loan requirements will help you make wise financial decisions and keep money in your pocket.
Keep visiting our blog for more interesting financial articles.
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