What Do You Need to Get a Car Title Loan?

Nov 02, 2020 03:30 PM EST | Ernest Hamilton

What Do You Need to Get a Car Title Loan?

(Photo : What Do You Need to Get a Car Title Loan?)

If you really have planned out to get a car title loan, you may need to stay conversed about the requirements and the procedural demands needed to follow. If you are unable to get out of home and think of "I need a car title loan near me" then you do not need to worry! There are hundreds of car title loans companies available online which will guide you through the process. One of the most popular of these companies is TFC Title Loans. You can also Google the name and get more information about TFC title loans.

Car Title Loan

A car title loan is a short-term loan in which the borrower's car is used as collateral against the debt. Borrowers are typically consumers who are unable to get loans from other financing options.

In this process, the borrower brings his or her vehicle with the necessary paperwork needed to get the car title loan. Although, some applications can be filled and submitted online, lenders still need to verify the condition of the vehicle and the completeness of the paperwork, before releasing the funds. After that, the lender keeps the title to the vehicle, places a lien on it and give the loan to the borrower.

The loan limit ranges from 25-50% of the car's cash value which can be quite expensive. This includes borrower repaying the loan with fees and interest within the given time period and reclaims the title, lien-free.

Essential Documents Needed for The Loan

To obtain a car title loan which is also known as a pink slip loan, a borrower must own a vehicle outright and there must be no liens against the title. Lenders also demand a specific paperwork procedure. This could be but not limited to, original vehicle title showing vehicle ownership and government-issued identification matching the name of the title. You may also need utility bills or some other proof of residency which confirms the name on the title. All lenders require current vehicle registration and proof of vehicle insurance. Some of them may even ask you to show recent pay stubs or other proofs which shows your ability to pay back a loan. You are also required to submit names, phone numbers and addresses of at least two valid references along with working copies of the vehicle's keys.

It is common for a lender to ask the borrower to install a tracking device in the car in case the borrower defaults and the lender wins the right to repossess the car. Some of these devices are designed to permit the lender to disable the car remotely if the circumstances demand so.

One thing which is relieving about getting a car title loan is that unlike other sophisticated, complex loan schemes, this one comes with less demands. You do not need to have a good credit to get a title loan. In fact, most cases, title-loan lenders would not even check your credit at all. This is because the loan entirely depends upon the resale value. Likewise, you do not need to be employed to qualify as a borrower.

Rates and Fees

Car title loans are relatively expensive than conventional loan banks. Interest rates vary but in some states, where the interest rate is not capped, it is generally set at 25% monthly or 300% monthly. This means that a consumer who borrows $1000 will need to repay $1,250 at the end of the 30 days to avoid going into default.

Most lenders charge a lien free. In states where title lending laws are not regulated, lenders also charge original fees, documents fees, key fees, processing fees and other fees. The fees add up quickly and can amount to an additional $25 on top of the loan and interest charges.

The Bottom Line

The best candidate for a car title loan is someone who owns a vehicle outright, understands the high cost of the loan and has a reasonable expectation of having access to the cash to repay the loan before the repayment period expires. If you are not aware of any significant loopholes in your plan to pay off the loan, a car title loan can amount to selling the vehicle for half or less of its value.

To sum it up, if you are sure about getting a car title loan and have valid documents to show to your lender, you can survey through different websites and find the most trusted ones, such as TFC title loans to help you through the process.

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