What are online title loans?
A car title loan, or an “auto title loan” or simply a ‘title pawn”, is a short-term secured loan where the borrower surrenders the hard copy title of their car to the lender and allows the lender to place a lien (a legal right on the property/vehicle used as collateral) in exchange for a loan amount for a short period of time. The repayment period for these loans is usually 30 days.
Do I need to add my car as collateral for an online title loan?
Title loans are usually expensive and you risk losing your car and only means of transportation if you default on payments. It is, therefore, important to understand how they work before you place your car as collateral for any credit.
How does a title loan work?
To obtain a loan using your car as collateral is much easier and the process may take less than 30 minutes. All you need to do is:
How to Fill out your online application form?
Fill out a loan application form online or in the lender’s offline store near you – most lenders have simplified their loan application process and it’s very fast to get your request approved.
Wait for your online approval
Once your request is approved, you can submit the required documentation to complete the title loan process. In this case, you’ll submit the clear title of your car, the car, proof of insurance, and a photo of your government-issued ID.
Get your online title loan deposited in your bank account
The funds will then be disbursed on your checking account on the same business day and once the transaction is complete, the lender will possess your car title until the loan is fully repaid.
Be careful to read the terms and conditions for your title loan
It is important to read the lender’s terms before signing their loan agreement form.
The lender has to tell you the cost of the loan, the interest charged, the repayment period and all the credit costs charged on the loan. Essentially, you need to be aware of all the finance costs and any other costs that could make your loan more expensive.
How expensive Is a car title loan?
In states where car title loans are legal, most lenders lend out to borrowers a maximum loan amount of 25% to 50% of the value of the car. These loans, therefore, range from $100 to $5,500.
How much can I get for a title loan?
Some lenders will, however, borrow out up to $10,000. Normally, lenders will charge 25% on average per month to finance your loan. This amount is equal to an APR of at least 300%.
The charges could even be higher if you factor in all the additional charges and fees the lenders may require from you. So let’s say you borrowed $500 for 30 days, you may end up paying $625 plus other additional charges (that is $125 plus the principal amount of $500) within 30 days.
For an average borrower who depends on his/her monthly income, paying off this single lump sum from their paycheck may not be possible. They will be late on payments, and will, therefore, be forced to roll over the loan into another loan.
What happens if I cannot pay my online title loan?
Late payments will attract penalties and even when you roll over the loan; it would still attract interest and other charges on the new loan. The borrower is then trapped in a cycle of debt that may be difficult to break and could actually lead to their car being repossessed by the lender.
If you are in a financial crisis and need instant cash, it would be best to seek other alternative sources instead of a title loan. You can borrow from friends and family, apply for a low-interest loan from a traditional bank or a credit service organization.
What do you need to get a title loan?
Here are the Eligibility criteria for car title loans:
- Be at least 18 years old.
- Have an active email address and phone numbers.
- Have an active bank account.
- Have a valid government-issued ID and proof that they are residents of the state they are borrowing from
Do I need proof of income for an online title loan?
Most lenders will require proof of income because they will want to be sure you are able to pay off your title loans.
Do title loan lenders perform credit checks?
They, however, don’t perform credit checks and no matter how bad your credit history is, you can still be approved for these loans. Your car as collateral makes you a less risky borrower.
Are Title Loans Bad?
We understand how frustrating it can be to be in a financial crisis. By filling our loan application form online, we connect you to a pool of lenders who will approve your loan request in less than 30 minutes.
There’s no need of wasting time searching through for cheap lenders, let us make your work easier by connecting you to trusted lenders who will not only offer financial aid but also ensure you don’t lose your means of transportation.