You’ve got an emergency and you need cash – fast. If you have a vehicle with a clear title, then a title loan may be just the ticket to get you out of your situation. The great thing is that you can keep your ride while you’re repaying the loan, plus you usually don’t need good credit. But you don’t know where such a lender is near you, or what to look for. On that note, here’s what you should know about finding a car title loan where you live.
What is a Title Loan?
A title loan is a simply a type of short-term secured loan wherein borrowers use their lien-free vehicle title as security, aka collateral. Note that this does mean that the lender can repossess your vehicle if you do not make timely payments.
How Do Title Loans Work?
When applying – you can often do so online – you must show the lender your vehicle (in photos or in person), your title, and your driver’s license. You’ll also be asked to provide pay stubs or some other documentation to prove that you have the income to repay the loan.
You’ll typically have 30 days to pay the loan off. It depends on the company, but many lenders will charge you around 25 percent of the loan total, which can be anywhere between $100 and $10,000 or so. Typically, your loan cap will be between 25 percent and 50 percent of your vehicle’s value.
How Do I Find a Lender?
Google is your friend – car title loans near me – but your search doesn’t stop there. When looking for a title lender, you want one with qualifications that include:
- Great service. Yes, you’re in a pinch, but you needn’t be treated poorly because of it. Look elsewhere if this happens to you. You also want any, and all, questions answered in a polite and prompt manner.
- Competitive rates. Rates do vary by company as well as the state you’re in, but title lending is a business. Lenders know that interest rates must be competitive if they want to stay in business. Shop around.
- Acceptance of subpar credit. Most lenders don’t even check your credit scores. They’re not worried about them, because they have your vehicle title as collateral. Lenders mainly just want to see that you have the earnings to repay them. If the company sweats you about your credit position, look elsewhere.
- Easy application processes. You can usually apply online, and that includes downloading vehicle photos, a copy of your photo ID, pay stubs, and other required documents. You also may be able to apply over the phone. The process shouldn’t be such that you must bend over backwards.
- No prepayment penalties. You want a company that doesn’t penalize you if you repay your loan early, which can save you money on interest.
- Appropriate credentials. See what licensing and registration requirements are in your state and make sure the lender in which you’re interested has them before you apply. Turn your heels on any company that won’t provide you with this info or is hesitant to do so.
- Experience. Because title loans are so different from any other kind of loan, you want a company that has as much experience as possible.
Ultimately, finding a title loan near you is just the first step. You also want to make sure the lender you’re interested in offers the above. So, while, yes, you are having a crisis, it doesn’t behoove you to stop at the first title loan company you find. Take a deep breath and look for the best one that suits you.
