Applying for a Title Loan Is Easier Than You Might Think
Applying for a traditional loan can be stressful if you have a bad credit score, and most traditional loan lenders will deny anyone with a score they deem too low. If you are struggling with your finances, you probably know that access to quick funding can be a considerable challenge.
The good news is that a solution exists for people with low credit scores! You can consider applying for a title loan if you need access to cash for an emergency. Most lenders for a title loan don’t focus much on a borrower’s credit history, although it will be considered. Instead, they look at how much value is in your car and if you have the necessary income to repay the loan back.
If you are experiencing a financial emergency or want extra cash, consider applying for a title loan!
How Does a Title Loan Work?
Title loans are great for people in challenging financial situations who need to receive access to funding quickly. That’s because the approval process is simple and has just a few requirements! Before you learn about the requirements, you should know what title loans are and how they work.
A title loan works by using a borrower’s car as collateral in return for quick funding from a lender. Lenders may look at a person’s financial background during the approval process for a title loan, but they care much more about how much value is in the car and whether or not the borrower can repay the funds.
Title Loans Are Secured Loans
Title loans are considered ‘secured loans’ for one main reason– they use a borrower’s car as collateral. The car is considered insurance for a lender if the loan isn’t paid back. A car may be repossessed if you miss too many payments, but this is typically the last resort any lender wants to take! You should contact your lender to discuss alternative options if you are struggling with payments.
They are typically short-term financial solutions for people because they can have short repayment windows. If you’re looking for a more long-term financial solution, you should look into traditional bank loans, which are given out in much more significant amounts and have long repayment periods.
Title Loan Requirements
There are only three main requirements you need to meet to apply for a title loan, and the good news is that they’re relatively straightforward and not as strict as other types of loans. The application requirements for a title loan are as follows:
1. Be an Adult at Least 18 Years Old
You can apply for some loans with a cosigner when you’re still a minor, like student loans, but that’s not the case for a title loan. You must be 18 years old to apply for this type of financing in most states. That’s because taking out funding this way is a big financial decision, and you should understand what you’re taking on as an adult borrower!
You can easily prove your age by showing some form of state or government-issued photo I.D. This can be a driver’s license or a passport. If you have a different format that is government issued, you can always reach out to a title loan agent to find out if it’s acceptable!
2. Have a Legal Vehicle Title in Your Name
You must have a legal vehicle title in your name to apply for car title loans. That doesn’t necessarily mean you must be the car’s driver to inquire! Perhaps a family member is the full-time car driver in another location. As long as the vehicle title is legally in your name, you can apply.
Lenders must see proof of the title in your name during the application process. Make sure you have this document on hand before beginning! If you can’t find your vehicle title for some reason, you can always reach out to the DMV in your state and inquire about replacement paperwork.
3. Show Proof of Income
While you are using your car as financial collateral during a car title loan agreement, lenders will still want to see proof that you are capable of paying back the funds. You will be required to show proof of a steady income, which you can do in multiple ways!
You don’t need to work a traditional 9-5 position to prove you have a steady income. Most lenders are flexible and can accept alternative forms of employment. Below are some examples of income you may be able to provide!
- Social Security Benefits
- Settlement Funds
- Worker’s Compensation
- Small Business Ownership
If you’re curious about your circumstances, reach out to a title loan representative to find out if they meet the income requirements!
Inquire About a Title Loan Today!
If you’re experiencing a financial emergency but also have bad credit, there is no better option than inquiring about a title loan. Car title loans are available in many states across the country! They provide quick funding to qualified borrowers, sometimes within the same business day as inquiring.
If you meet the three initial requirements of being an adult, having a legal car title in your name, and showing proof of income, you may be approved for this financing! Reach out to a title loan representative today to learn more.