Cash Loan For Car Title: Bad Credit Loans Secured By Auto Title As Collateral

June 17th, 2009

Sometimes we’re faced with financial emergencies that require that we get cash on very short notice. And since when it rains it pours, such financial problems tend to rear their ugly heads exactly at times when family members and friends can hardly give us some help. For those who do have the money but it’s locked in a CD, we’ve already covered the option of a certificate of deposit loan. If you don’t have the money, but you own a car, there’s another solution available to you, and it’s a type of loan called a “car title loan”

What’s a car title loan?

A car title loan is a specific type of loan that allows a customer who own a car outright the opportunity to borrow against the automobile. The bank lends you a certain amount of money, generally between 25 percent and 50 percent of the car’s value. In return, an extra set of keys, and the title certificate of the car are kept by the bank, as security for the loan. In case you’re unable to repay the loan, the bank can confiscate the car and recover the money that you owe them.

If you repay the loan in the specified time allotted, then you regain the title and extra set of keys. However, if you cannot make the payments, you simply lose the car.

What are the requirements to apply for a car title loan?

Here’s what you need to apply for a car title cash loan. You need to have a title in your name, as well as a phone bill or other utility bill that verifies where you live. If you own a home, a mortgage statement in your name is acceptable. You also have to show that you have lived in your home (or rented) for at least 12 months, and you have to have a job that you’ve held for at least one year. Other demands are that your car is fully insured and that your income is at least $12,000 per year. Any one 21 years old is eligible to apply for a car title loan. It does not matter if you have bad credit history as the loan process is independent of the credit report.

Applying for a car title loan does not take too long. Just walk into a loan agency or fill out the form online and the loan will be processed in 24 to 48 hours. Generally, lenders loan up to 50% of the vehicle’s value, which takes care of any depreciation in the price of the car over the repayment period.

Common features and terms of auto title loans

The applicant gets to keep his/her vehicle (in spite of it having been pledged as the security for securing the loan) for as long as they don’t default on their loan repayments. If that’s the case, the car can be repossessed by the lender to cover the loan costs.
Car title loans approval is quick and easy. All you have to do is to drive to the nearest financial office with the title papers and a proof of residence for the loan to be processed. You can also fax in the required documents for the loan to be approved. Within hours you will receive up to 50% of the retail value of your car.
The vehicle title is your credit meaning that even if your credit score is poor, you will still be advanced with the required loan amounts.
The loans are short term (14 days to a month, with renewal options), meaning their interest rate is higher than would have been expected in long term loans. In case the loan term is extended, lenders have to understand they’ll need to pay the interest rate for the extended period of time as well.
No credit check is performed on the borrower when applying for these loans, thus their approval is instant.

The advent of the Internet has opened up new ways for banks to conduct their business. Many banks have websites and allow customers to apply for car title loans online. It is very easy and convenient with one online form that needs to be filled out giving details regarding name, address and other relevant information. Then, a company representative calls the customer and sets up an appointment for a personal interview.

Terms and conditions will vary from bank to bank, and it’s definitely recommended to shop around to get a better deal: go through various guides available in the market, and understand all the terms and conditions, before taking a car title loan. Because of their high cost, car title loans should only be considered as an option to pay small financial emergencies.