How Much Can I Borrow Against My Car’s Title?

How Much Can I Borrow Against My Car’s Title

You’ve struck out trying to come up with the cash you need to cover something urgent, and you’re unsure where to turn. You’ve heard about car title loans, but you’re wondering whether one would cover your situation. A title loan calculator can help with that, and there are other factors you should know about as well. All that’s covered below.

What is a Title Loan?

These are short-term secured loans that usually come due in 15 to 30 days, although some lenders offer longer terms. They are available online, not from traditional lending institutions, but from lending companies. The loans are especially appealing to those who either aren’t eligible for a bank loan, or don’t have time for what can be a lengthy process.

An industry draw is that unlike with pawn loans, you get to keep your car while you’re making payments. But do make them, or risk your vehicle being seized and sold to cover the forfeiture. Your loan is secured by your vehicle’s unencumbered title, which the lender will keep as security until the loan is repaid, plus interest.

How Much Can I Borrow?

The amount of your offer will depend on a host of factors, including your income (more on that later) and the make, model, age, and mileage of your vehicle. The title lender may also consider the vehicle’s style and any alterations or modifications.

Some lenders offer a loan calculator on which you can input vehicle information and get an idea of what you might be able to borrow. Loans tend to range between a $100 and $10,000, and sometimes go higher.

Of note, some title lenders will pull your credit report, but they won’t base any decisions regarding loan amount or eligibility on it. 

What Else Do I Need?

In addition to a vehicle – car, truck, motorcycle, or RV – and clean title, you’ll need to show proof you have the wherewithal for loan repayment. If you’re employed, you’ll need to submit paystubs or bank statements and the like. If you don’t have a job, income from sources including self-employment, Social Security, Worker’s Compensation, settlement income, rental property, or a retirement savings account will likely also be accepted.

You will also need to have a government issued photo ID and proof of residence (lease agreement, utility bills, etc.).  Some title loan companies require personal or professional references and proof of vehicle insurance.

In lieu of driving your car to the lender for appraisal, which does take time, you’re simply required to submit quality photos of it from all angles, plus a clear shot of the odometer and vehicle information number.

How Long is the Process?

Another industry selling point is that these loans tend to be processed in short order. For one thing, you can apply online, which is expedient right there. Once you’ve sent in the application, along with required documents, you’ll typically hear from the lender that very day. Following approval, you can have money in hand by the following day.

You will probably have options in terms of how you wish to receive the funds. Your options may include direct deposit in a bank account (or debit card), getting an overnight check, picking up funds at a local wire transfer location, or an ACH transfer, if you have that capability. 

A vehicle title loan can really come in handy if you need cash – fast – and you have a car and clear title. Just be 100 percent certain you can pay the loan back.

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