9 Frequently Asked Questions About Title Loans (Answered) 

If you have found yourself in a situation where you need quick cash in a hurry, and maybe don’t have the most perfect credit score or credit history in the world, title loans can be a fantastic option. 

Certainly, one of the most popular nontraditional financing options available, title loans put you back in the driver seat of your financial freedom without requiring you to have a spotless credit report. 

It’s easy to get your hands on anywhere between $500 and $5000 of quick cash when you use the right title loan services. Even still, though, you want to make sure that this is 100% the right road to take – and that’s why we have put together this quick guide.  

Question 1: What Exactly Is a Title Loan, Anyway? 

To put it simply, a title loan is a form of alternative lending that uses your vehicle title as a form of collateral to secure the financing you need ASAP. 

Question 2: Are Title Loans Legal? 

Title loans are 100% legal to take advantage of, and thanks to some very consumer friendly rules and regulations passed by most of the states around the country, you have a lot less to worry about than ever before. 

A lot of the more predatory alternative lenders have been pushed out of the industry completely thanks to these new changes. Title loan lenders must abide by a host of rules and regulations that dictate the interest rates and repayment terms they can offer. 

This has made moving forward with legitimate title loan lenders a lot safer – and smarter – than ever before. 

Question 3: Will My Credit Get Checked When I Apply for a Title Loan? 

Absolutely not! 

One of the biggest advantages of a title loan is that you don’t have to have perfect credit to get the funding that you need – or really any credit whatsoever! 

Because you will be putting your vehicle title up as collateral you are able to “secure” a loan from these lenders. That asset will be used to determine the amount of funding you can get (usually between $500 and $5000, as we highlighted earlier), and using it as collateral guarantees you don’t have to have good credit whatsoever to use these loans. 

Question 4: How Much Money Can I Borrow with Title Loans? 

The overwhelming majority of title loan lenders offer anywhere between $500 and $5000 when it comes to their title loan packages, though some are going to have numbers a little towards the lower end of the spectrum and others may be able to off a little more. 

The industry average for title loans around the country sits at about $1500, though. 

It’s always a good idea to find out how much money you’d like to have loaned to you before you get the process started. You might be surprised at how much cash and capital your vehicle can be used to secure, but you won’t want to “max it out” if you don’t have to. 

Question 5: What Kind of Interest Rates Can I Expect? 

Interest rates are a little bit all over the place when it comes to title loans, but they have gotten a lot lower thanks to some landmark legislation passed throughout the United States. 

It’s not at all unusual for title loan offerings to have similar interest rates to most common credit cards, again without the headache and hassle of having to have a spotless credit history or a great credit score to get the financing that you need. 

All the information related to your interest rates will be shared before you sign on the dotted line. It’s important to calculate your future interest payments out before you take on any money, though, just so you know exactly how much cash you’re going to be on the hook for later. 

Question 6: What is the Application Process like? 

It’s hard to imagine a more simple and straightforward loan application process than this one. 

All you really have to do is find a title loan company that you like to do business with, go through the 5 to 15 minute title loan application process online (verifying your identification, your income, and your vehicle information), and you’ll – almost always – get an immediate approval or denial right there on the spot.

Question 7: How Quickly Will I Get My Money?

If you are approved for a car title loan, you’ll usually get your cash inside of 24 to 48 hours. 

Sometimes it’s going to take a little bit longer – it may take four or five business days for you to get your cash, especially if you are having a paper check mailed to you. And some companies can get you your cash even faster than that, especially if you apply and are approved in person. 

Approvals in person might even be able to hand you cash right there on the spot, with you walking away from the title loan business with cash in hand inside of an hour or two. 

Question 8: How Long Will I Have to Pay Off My Title Loan? 

Again, each title loan is a little bit different from any other but there are some similarities between options across the industry. 

Most of these loans are short-term loans in nature. Auto title loans are available for anywhere between six months to 12 months (maybe out to 18 months or so). Some title companies offer loans that are even shorter than that – three-month loans – whereas others and stretch it out to 24 months in some situations.

This is information you’ll want to confirm before you sign on the dotted line. You’ll want to know how much interest you’re going to accumulate over the life of your loan, how many payments you’re going to make, and when your title loan is going to be returned to you after you successfully payoff this financing plan. 

Question 9: Do I Have to Own My Car Outright to Get a Title Loan? 

Some companies in the car title loan business are going to require that you have your car title paid off completely before you secure financing, but others may not.

That’s not to say that you won’t be able to get a title loan if you still have to make payments for your vehicle. Some organizations are willing to help you in that situation. But you’re definitely going to be in for a steeper climb and may have to expect less cash available, higher interest rates, and shorter repayment terms because of it.

At the end of the day, though, a little bit of shopping around will show you that it’s not hard to find title loan options to fit your needs, your financial situation, and the value that your vehicle brings on the open market right now.

You’ll obviously want to be sure that you are only ever working with 100% legitimate title loan operators with a great reputation, though. You will want to fully review your loan agreement and application before signing anything, and you definitely want to make sure that you know exactly how much this loan is going to cost at the end of the day, too. 

Other than that, though, there really isn’t all that much to leveraging these kinds of financial services.

Commit to working only with real deal professionals in the space and you’ll be able to get almost instant access to the cash you need when you need it most, without headache or hassle.

References

https://titlelo.com/faq.php

https://www.titlemax.com/faqs/

https://www.advanceamerica.net/faqs/title-loans

 

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