Borrowing money isn’t easy, especially if you want the cash offered by a personal loan. In Quarter 1 of 2018, 14.5 million Americans applied for new credit cards, but only about 3.5 million asked for unsecured personal loans.
And that figure was almost one 1.5 million people higher than before the 2008 crash, in part because there are new ways to get personal loans beyond begging your banker for a chance.
If you need cash fast but the bank iced you out, then you have a reliable option: car title loans.
All you need to do is own a car and have a job, and you can borrow. Here’s how it works.
What Do I Need for a Title Loan?
There are very few requirements to get a title loan. Mainly all you need is a car with your name on its title. You also need to provide proof of ID and proof of a monthly income.
If you can do this, you can borrow somewhere between $200 and $50,000, depending on the value of your vehicle.
Keep in mind that when you borrow more than a certain amount, some lenders may also ask you to provide proof of your car insurance, and that’s completely understandable.
What If I Have Bad Credit?
Credit isn’t an issue in car title loans because they’re a secured loan.
That means the lender ties the amount you borrow to the value of your car, not your history of paying your bills. It provides an extra level of security for the lender in case something goes very wrong, and you can’t repay your loan.
It’s also why it’s much easier to get a secured loan than an unsecured loan from the bank.
What If I Don’t Have My Title?
Are you still financing your car? You can borrow against the equity of your vehicle. The equity is the difference between the value of your car and what you still owe on it.
You may also need extra proof of ownership of the vehicle if you can’t provide the title, and the funds available to borrow may possibly reduce.
How to Pay Back Car Title Loans
You can get a car title loan in a day, and your loan term reflects the amount you borrow.
With a title loan, you can have a term as long as six months to repay your loan. Again this can vary significantly from the lender to lender.
You will know what your payment amount and schedule is before you accept the money. So, you can adjust what you borrow to make sure you can afford the payments comfortably.
If you worry about defaulting on a title loan, talk to your lender before you miss a payment, and they can help you work out what to do next.
Should You Try a Secured Loan?
Car title loans are a type of secured loan that allows you to borrow against your car’s value. It doesn’t matter if you have excellent credit or a high-paying job.
Because the vehicle offers security, borrowing is much easier than begging the bank for an unsecured personal loan or even getting a credit card.