What Is a Title Equity Loan?
We’ve all stressed over bills at one time or another. However, if you don’t own much of value, you may have ruled out the idea of getting a loan to help with finances. Wait a minute, there is a good chance you’re driving around town in a vehicle that just might qualify for car collateral loans. These auto equity loans are used all the time for folks in need of some quick cash to help out with bills. Essentially, they use your vehicle as collateral to obtain a quick cash loan. These are secured loans, which reduce the amount of risk that a lender takes on when lending cash. Most importantly, you can use the money for anything, and you won’t be penalized for poor credit. If you’re struggling with finances and looking for a financial solution, learn more about car title loans.
A title equity loan is usually a short-term loan that is easy to qualify for and doesn’t require a lengthy application method. Many title equity loans come with competitive interest rates and affordable repayment packages if you find a reputable title lender. Loans are secured using the title to your vehicle. If you fail to meet the repayment terms, vehicles can be repossessed and sold to recoup loan losses. Auto title loans can be obtained from brick and mortar stores and today, there are a number of online title lenders ready to supply quick cash.
Auto Equity Loans
Many title lenders prefer that vehicles are paid in full and have clear titles. In other words, there are no liens listed on the car title. These are the easiest types of loans to process. However, there are still several lenders that will process a little extra paperwork to approve auto equity loans.
The only difference is that vehicles offered as collateral on equity loans are not fully paid for, and titles do list one or more lien holders. So, borrowers can receive a loan based on the equity in the car, which is the difference between the value of the auto and what is still owed on the vehicle.
Who Could Be Approved for Car Collateral Loans?
You might be surprised to learn about the number of people that take out car title equity loans. Although loans are frequently used to cover emergencies, borrowers come from all income levels who need quick cash. You never know when you’ll need extra cash because of a job loss, cut in hours or lost wages. These are just a few examples of the types of folks that rely on title equity loans.
- College students.
- Self-employed folks.
- People working part-time jobs.
- Retirees that need a little extra cash.
- Folks working on commission.
- Unemployed people in between jobs.
- Homeowners struggling to make ends meet.
- People working for minimum wage.
- New entrepreneurs that need capital to start a business.
Frequently Asked Questions About Equity Title Loans
- Can I qualify for a loan if I am retired and living on a fixed income? - Yes, you certainly can qualify for a loan. If you have regular income from retirement investments, Social Security or possibly disability benefits, you could qualify for a loan using anyone of these income sources.
- Will I be turned down for a loan because of my bad credit? - Whether you apply for a regular auto title loan or an equity loan with a title lender, you would not be turned down because of bad credit. Regardless of your personal credit situation, title lenders don’t penalize folks with bankruptcies, bad credit or no established credit history.
- Does the car title have to be in my name? - Yes, it is necessary that you are listed as the legal owner of a vehicle for loan purposes. If you own the vehicle, you can contact the Motor Vehicle Department in your city to change the name on the title.
- Can unemployed people be approved for car title loans? - Yes, many title lenders approve loans for people that may not be currently employed. Sometimes loans are approved based on a new job you’ll start in the near future. You could also be qualified using unemployment benefits.
Borrowing Requirements for Equity Title Loans
Each title lender may have their own set of requirements for borrowers, but these are some of the most common requirements:
- A government identification card confirming you are at least 18 years of age.
- A vehicle in working condition.
- Regular car title loans require a car title free of liens.
- Equity loan lenders will accept car titles showing liens if the vehicle is almost paid for.
- The majority of title lenders require some type of income.
- Most online title lenders do not require a physical vehicle inspection.
- You may be required to show proof of residency.
- A few lenders require proof of auto insurance.
- Some lenders may require a duplicate set of car keys but most do not.
The Basic Equity Title Loan Process
Complete an Application
Car title lenders go out of their way to make it easy for new customers to apply. Most lenders offer:
- Applications by phone.
- Free online applications.
- Convenient loan center stores where you can speak with loan representative, ask questions and complete and application.
Most online applications simply require your name, zip code and telephone number. You’ll also need to provide the age, make, model, body style and mileage estimate for your auto.
If you have chosen to apply online, you will likely receive an instant loan quote based on the information you supplied in your application. Shortly after applying, you’ll receive a call from a loan representative.
The loan representative will walk you through the loan procedure, confirm you have income and help you to find a suitable repayment plan for your loan. You’ll also be required to turn in your car title, and you must sign a contract. Normally, car title loans are paid out at loan center stores immediately after closing the loan.
Summary of Title Equity Loan Advantages
- Fast cash when you need financial help.
- No prepayment penalties.
- No credit checks.
- No spending restrictions.
- Competitive interest rates.
- Professional services.
- Convenient online applications.
- Payouts in a day or less.
- No driving restrictions during the loan term.
If you’re struggling with bills or need some extra cash, consider the benefits of car collateral loans.