A car title loan is a fast and easy way to get cash using your car title instead of your credit score. When it comes to getting good information for car title loans, online resources are important. The size of your title loan is determined by the amount of cash you need, your vehicle’s value, and your ability to repay. So many company focuses on getting you as much cash possible, while keeping your payments manageable, all you have to do is some research to see the right company to go with. When it comes to auto title loans, online applications make the process faster and easier. You can start the process online, so you can get the cash you need as quickly as possible.
Car title loans offer many people a way to quickly get a short-term loan, but they’re generally very costly. To get an auto title loan, you’ll need to pledge your vehicle as collateral by handing over the title to the lender until the loan is completely repaid.
If you’ve got no other options—for example, you might need funds right away for emergency medical treatment—a title loan could make sense.
How Car Title Loans Work
To borrow against your vehicle, you need to have at least some equity in your car. In many cases, you need to have paid off any other loans used to purchase the vehicle, but some lenders allow you to borrow if you’re still paying off a standard auto purchase loan. On average, these loans can range from $100 to $5,500.
The amount you can borrow is based on the value of your car or the equity you have in the vehicle. The greater the value, the more you can borrow, but don’t expect to squeeze the car’s full value out of a title loan. Lenders want to make it easy on themselves to get their money back, so they’ll lend only what they can quickly and easily get for the car if they have to repossess and sell the vehicle. Most lenders will give you a loan for between 25 and 50 percent of your car’s value. They may also install a GPS tracking device on your car, in case you’re thinking of hiding the car instead of paying off the loan.
Paying the Loan
Title loans are short-term loans, often due within 15 to 30 days. That means you have to quickly come up with the funds for a complete repayment, known as a balloon payment, and that’s rarely as easy as you’d hope. In some cases, you can extend repayment by “rolling over” the loan.
Instead of paying the loan off, you get a brand new 30-day loan. However, rolling over becomes an extremely expensive way to borrow because you have to pay new loan fees every time you do it. State laws sometimes limit whether rolling over is an option.
You may find that your lender is charging you 25 percent interest for one month, which may not sound that bad. However, if you were to carry that loan for a full year, the annual percentage rate (APR) of interest actually equates to about 300 percent.