You’ve found yourself up against it and you need cash fast. You’ve heard about vehicle title loans, and you have the necessary vehicle and clean title, and the income for loan repayment. You know you can’t qualify for a bank loan because of poor credit, so you’re wondering, can you get a title loan with bad credit? In short, yes, you can. Keep reading for more.
What are Vehicle Title Loans?
These are short-term loans that come due in 30 days or less, although longer terms may be available, depending on the lender. Note that with payday loans, the entire balance is due with the borrower’s next paycheck.
Title loans are based on the equity you have in your vehicle, which is generally based on its make, model, model year, mileage, and general condition. Some lenders will also consider factors such as style, trim level, and any modifications.
In exchange for a loan, the borrower must relinquish their unencumbered vehicle title to the lender until the loan is repaid. The vehicle must be in the borrower’s name.
You can keep your vehicle during the repayment period, though. This is a marked departure from pawn title loans, which require you to leave your vehicle with the shop until the loan is paid off, with interest.
Do understand that with title loans, your vehicle can be seized and sold to cover losses if you do not make payments as agreed. If you’re struggling in this regard, contact the lender right away. Some title companies will allow you to refinance your loan and get a better interest rate, which would lower your monthly payment.
By the way, depending on the lender, “vehicle” can mean RV, motorcycle, or boat, in addition to car or truck.
How Much Can I Borrow?
That varies among lenders and depends in part on state regulations, but you can expect to be able to borrow between 25% and half your vehicle’s value, as determined by the above factors. Most loans average around $1,000, although they can range between $100 and $10,000 and more.
Rather than taking your vehicle in to be appraised, you’ll merely need to submit recent photos of it, taken from all angles in natural light. Include shots of the odometer reading and vehicle identification number as well.
The amount you can get also depends on your income. You guessed it: the higher the better.
What Else Do I Need?
This also varies among title companies, but you’ll generally need a government-issued photo ID and proof of residence (utility bills, lease agreement, etc.). Some companies also require personal or professional references.
When applying for a title loan online, you must include proof you have the income to repay a loan. If you have a 9-to-5, that means pay stubs or bank statements. Alternate income sources will also be considered. Those may include worker’s compensation, Social Security, a legal settlement, a pension, or self-employment and the like.
What About My Bad Credit?
Title companies lend money to people with bad credit every day. Your credit history is not a focus, even though some lenders might look at it. Because your lender will have your title, it isn’t all that concerned about risk.
In this way, title loans are a good alternative to bank loans, which are usually unsecured. As such, they are based on your credit and thus are harder to get.
How Long is the Process?
It’s not long at all, in fact, it’s pretty fast. Once you’ve submitted your application online, along with required documents, you will likely hear from the lender that day. Once you’re approved, your funds will available the next business day. You’ll have options in terms of how to get your money, including wire transfer and direct deposit.
So, yes, you certainly can get a title loan with bad credit, as long as you have an eligible vehicle and title loan, and loan repayment ability.