Title loan application in the United States

Get up to 90% of the evaluation. Up to $ 15,000.

By what the required money will be secured
Amount
1 000 $
15 000 $
Term
1 months
84 months
Amount
3 500 $
Term
12 months
Monthly payment
341 $
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How it works

Simple registration
Simple registration
Fill out a short form, verify your data and log in to your account.
Rating analysis
Rating analysis
The system will analize your individual credit rating for free and offer a personalized report.
We will send your application to lenders
We will send your application to lenders
Our partners will provide you with the best offer based on your credit score.

What is an auto title loan?

Auto title loans are essentially ordinary loans, with the only difference being that the lender pledges your car as collateral. It seems very simple; pay up, and you're good to go. However, if you don't pay, you will lose your car because the lender will confiscate and sell it as your property. And they have every right to do so.

Title loans - when should you take them?

Using a car as collateral happens when we want to borrow a large amount of money or don't have creditworthiness. Of course, you can say that you can always sell the car. But then you will get rid of your only means of transportation. Borrowers get the money with auto title loans but still can continue to use their car. Of course, until they repay their debt according to the loan agreement.

A car is not a particularly privileged form of collateral, and it is primarily about its value. The collateral has to be an item of high value, which cars usually are. Sometimes the borrower can own a vehicle with the same value as the apartment. Jewelry, expensive watches, or other items can also be collateral. This form can be found in mortgages or other conditions that require a guarantee.

What are the major types of car title loans?

Let's take a look right now at the types of car title loans:

  • A car title loan to buy a new car.

  • A car title loan to buy a used car.

  • An old car is often collateral for purchasing a new vehicle.

Compared to traditional car leasing, where a new vehicle becomes collateral, this approach has its advantages:

  • Gain access to the modern car without waiting years to save up for it.

  • The borrower becomes the sole owner of the new vehicle.

  • The new vehicle is protected from the risks of leasing and remains at the borrower's disposal in any case.

Similarly, you can get a car title loan to purchase other vehicles: boats, motorcycles, tractors, etc. If the loan provided is inadequate, the loan amount can be combined with personal funds and savings, and you can buy the desired vehicle as quickly as you want.

How to apply for a car title loan?

There are two ways to apply for a title loan. You can go to a bank branch, fill it out through the lending company's website or apply on Finanso®. Because of the convenience, customers most often apply online.

If you choose to register on all the available websites, you need to fill out the form and submit the application on each one. First of all, enter your personal and address information into it. In addition to the standard personal and financial information, you also need to fill in the fields related to the car. Therefore, you need to have the VIN and license plate number. You also need to include the make, model, and year of the vehicle. This information is necessary for the car appraisal, determining your loan amount.

If you choose to apply with Finanso.Multilogin, you need to fill in your data for the once-off and submit your application to hundreds of lenders in one click.

Most companies offer loans without proof of income and will not check you in databases. After filling out the online application, you have to wait to be contacted by a loan manager, and it usually doesn't take more than 24 hours. The response will tell you if you are granted an auto loan online and in what amount.

What are the main requirements for obtaining car title loans?

You don't have to worry about the lender monitoring your financial situation. But, understandably, it's not the best. After all, you need money, which means you're in financial hardship. A car, in this case, is essential protection, and for this reason, the requirements are minimum.

Essential requirements for obtaining a title loan:

  1. You must be the sole owner of the car.

  2. It is necessary to have a current inspection and car insurance.

  3. Of course, for purely legal reasons, you must have a valid ID and be at least 18 years old.

Ways to get a car title loan

After receiving a favorable decision on the application, the borrower has several ways to get the loan amount. In particular, he can get it directly into the bank account, in cash, or by check.

The loan process is not complicated. Applying for short-term loans is similar to an ordinary payday loan, even with the collateral. First, you provide contact information such as your email address, first and last name, and information from your ID card. The next step is to provide information about the vehicle you want to mortgage. You will need to give the year and make of the model and the VIN and license plate number.

Another critical point is the car inspection, which the loan officer makes in the presence of the pledger. The pledger provides the financial institution's representative with a photo ID and shows the car's insurance. Then, there is an assessment of the vehicle, which will later be decided on the loan amount the borrower can get. Banks rarely offer loans for the total cost of the car due to the high risks associated with its wear and tear. Usually, a borrower will be offered a loan of 25% to 50% of a car's value. If we are talking about short-term loans, the loan amount can range from $100 to $5,000.

A closer look at a car title loan agreement

When it comes to the loan agreement and the formalities of a title loan, they appear less complicated than you think. After you apply and get a favorable decision on a loan, the lending company provides you with two sets of documents. The first is a loan agreement, similar to unsecured loan documents. The second document is a car transfer agreement. It states that at the time of signing, the company becomes 51% owner of the car and undertakes to transfer all rights of ownership of the vehicle, subject to repayment of the loan.

–°ar title loans are an opportunity to get money for customers who can't take advantage of traditional loans because of bad credit history.

Even if you cannot prove your income or have a poor credit score, this option allows you to get a loan with a more extended repayment period and a more significant amount than payday loans. 

Get more cash with car title loans

Companies offering payday loans can provide borrowers with as little as a few hundred to a few thousand dollars without any collateral and with a high-interest rate. Every bank requires proof of solvency in an account statement, Form W-2, and a good credit score. These requirements are not the case with a car title loan company. With a title loan, you can get up to 60% or 85% of car value with a repayment period of 10 years. It all depends on the particular company whose services the client uses. Such money, received in the account, can be used for repairs, purchase of household appliances, or travel.

How to repay car title loan debt?

The borrower repays car title loans according to the payment schedule.

They can repay the loan in cash by visiting lenders' branches or using the mobile app to remotely paybacks, which is convenient and does not take much time. Checks are another popular repayment option. And finally, a borrower can also make a wire transfer from their bank account.

If you don't make payments on the title loan on the due date, the lender will charge you a penalty, and if you default for a few months, it will sell your car.

Let's discuss the common difficulties in loan repayment and ways to solve them.

Temporary financial difficulties do not allow you to repay the loan timely?

It is better to apply to the lender for prolonging a title loan and explain the reasons to the loan manager. Then, the financial institution will consider your application within 3 to 7 business days.

A borrower can't repay car title loans according to the schedule

You must make an application to change the repayment schedule, stating the reasons; for example, you received your salary later than required to make a loan repayment. Most likely, the lender will meet you halfway and rearrange the schedule.

Pros and cons of a car title loan

A loan secured by a vehicle is different from other types of loans. With collateral, the rejection probability is much lower.

Let's consider the main advantages of title loans:

  • No guarantors because the borrower will guarantee repayment of the debt with the pledged car.

  • With good collateral, you can count on a maximum loan amount.

  • Opportunity to get a car title loan online.

  • It is obtaining approval with a bad credit history.

  • Pledging for a new and expensive car can help you get money quickly.

  • A minimal number of documents.

  • Lower interest rate compared to payday loans.

  • The rules allow you to use the pledged vehicle.

The disadvantages of this type of loan can include:

  • A borrower can lose a car if they cannot repay their debt.

  • The personal loan amount depends on the value and condition of the car provided as collateral. You can get a minimum loan amount if your car conditions are fair, and the best loan options are only available with an excellent conditions vehicle.

Thus, the lending companies' customers can quickly obtain the money by providing the vehicle as collateral. It is essential to study all details of the loan agreement to ensure the benefits. Timely repayment and compliance with the lender's conditions will allow you to keep the car in your possession.

Legal regulation of the car title loans market in the USA

The Consumer Financial Protection Bureau regulates the market for car title loans.

It's essential to keep in mind that each state has its own rules regarding auto loans. For example, in Texas, there are not many rules. The interest rate cap is 10%, but many lenders are Credit Access Businesses (CABs) in practice. These companies help make loans and are often not regulated. In addition, there is no cap on fees in Texas, and for every $100 borrowed, a borrower can pay about $23. So don't be surprised if the APR is in the triple digits.

Twenty states, Alaska, Arkansas, Colorado, Connecticut, the District of Columbia, Florida, Hawaii, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New York, Oklahoma, Rhode Island, Vermont, and Wyoming, restricted an APR for a $10,000 loan to 25% or less. 

Arkansas, Maine, and Vermont are specifically protecting consumers, with APR limits of 17%, 18%, and 18%, respectively.

Eleven states (Arizona, Louisiana, Michigan, Mississippi, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Washington, and West Virginia) have an APR restriction between 26% and 30%. Seven states are on the low quit of this range, capping APRs at 26% or 27%.

One state, Iowa, allows a 32% APR, and five states (Illinois, Montana, New Hampshire, Oregon, and South Dakota) permit 36%.

The actual cost of a car title loan

The real cost of a car title loan equals loan principal plus interest plus origination fee (if applicable) plus additional fees depending on your circumstances.

Before taking out a car title loan, consider all the fees you will have to pay. Here are the main ones:

1. Origination fees

2. Late payment fees

3. Prepayment penalties

Origination fees can range from $30 to $100, depending on which lending institution the borrower chooses.

If you do not make your next payment by the due date, you will pay a late payment fee. This fee will average about $25 for each missed payment. The penalty for paying off your loan early is usually a percentage of the total loan amount, or it may be a flat amount, depending on which amount is higher.

These loans are convenient and allow you to borrow even with a bad credit history. But at the same time, if you violate the loan agreement, you risk overpaying more than 50% of the initially negotiated amount. Thus, we can define that car title loans are not the cheapest loans in the US.

When should one take a title loan?

When is it reasonable to obtain car title loans? Many situations are conducive to taking out such a loan. One of them occurs when all the financial institutions have refused to give you an unsecured loan. There are many reasons. You may have some delinquencies, and your credit score does not convince them to trust you. Your income may also be too low for the desired loan amount.

All of this can lead to lenders' rejection. In the case of a cash loan for personal needs, traditional banks do not use the option of accounting for collateral.

A borrower must provide the funds to repay the loan from their current source of income. If they can't meet this condition and want to borrow an amount ranging from a few hundred to tens of thousands of dollars, they have no choice but to contact private lending companies. They operate entirely legally in the United States, registered as VAT payers.

Most of these companies have websites where the customer can check their offers.

To make it easier for their customers to get secured loans, these companies provide accessible online applications. You also do not have to go to the loan company with this application. Instead, the application is sent online with a click of the mouse. The staff then receives the application and analyzes it.

They are the ones who decide on the loan, and they also set the maximum value of the secured loan that you can get.