Classic Car Title Loans in the US

What is a classic car title loan?

A classic car title loan, also known as an older car title loan or vintage car title loan, is a type of secured loan that allows individuals to use their classic cars as collateral to obtain a loan. These loans are specifically designed for classic car owners who may need quick access to cash but don't want to sell their cherished vehicles.

With classic car title loans, the borrower temporarily surrenders the title of their classic car to a lender in exchange for a loan amount. The appraised value of the classic car typically determines the loan amount. It's important to note that classic cars are typically older and may have a higher intrinsic value compared to regular vehicles, making them valuable assets for securing a loan.

The borrower continues to possess and drive the classic car while repaying the loan, but the lender holds the title as collateral. Once the loan is repaid in full, the borrower regains full ownership of the classic car, including the title.

Features

Collateral-Based. Classic car title loans are secured loans, with the classic car serving as collateral. The loan amount is determined based on the appraised value of the vintage vehicle. This means that the borrower's classic car is used as security for the loan.
Maintain Ownership. While the lender holds the title as collateral, the borrower continues to possess and drive the classic car. This allows the borrower to enjoy their vehicle while using it to secure a loan.
Quick Access to Cash. Classic car title loans offer a relatively quick and convenient way to access cash. If the vintage car has enough value, borrowers can often receive same-day cash, making it a suitable option for handling emergencies or unexpected expenses.
Simple Application Process. The application process for classic car title loans is generally straightforward. Borrowers can often apply online, conveniently upload necessary documentation, and provide basic information about their classic car and themselves.
No Credit Check. Most lenders of classic car title loans do not perform extensive credit checks. This makes these loans accessible to individuals with bad credit or a less-than-perfect credit history.
Loan Repayment Terms. Borrowers are required to make periodic payments to repay the loan. The specific terms and conditions may vary between lenders, so it's important for borrowers to understand the repayment schedule and any associated fees.
Resale Value Consideration. Lenders often consider the resale value of the classic car when determining the loan amount. Classic cars with higher intrinsic value can typically secure larger loan amounts.

Pros and cons

Pros

No Credit Check. Title loan lenders seldom check credit history, so if you have poor credit or little credit history but need to take out a small, short-term loan, a car title loan may be a way to secure some funds quickly. This makes classic car title loans an accessible option for those facing credit challenges.

Quick Access to Funds. Classic car title loans offer a swift way to access much-needed funds. If you have a classic car with value, you can typically get the cash you need on the same day, making it suitable for handling immediate financial needs or emergencies.

Credit Score Unaffected. Since the title of the classic car secures these loans, they are unlikely to impact your credit score. This is a relief for borrowers concerned about the potential impact on their credit history.

Cons

Risk of Vehicle Repossession. One of the significant risks associated with classic car title loans is that if you fail to repay the borrowed amount, the lender may take possession of your classic car. This can be especially distressing for individuals who value their vintage vehicles.

High Costs. Classic car title loans can be expensive. According to the Federal Trade Commission, they often come with an average monthly finance fee of around 25%, resulting in a high APR of approximately 300%. These high costs can make the loan difficult to repay.

Short Repayment Period. Borrowers typically have a short timeframe, often 15 or 30 days, to repay the loan. This short repayment period can add to the financial strain, making it challenging for some borrowers to meet their obligations.

Potential Debt Trap. Car title loans can turn into long-term debt traps. According to the Consumer Financial Protection Bureau, over half of auto title loans become extended debt burdens. Additionally, a report from the same agency in 2021 found that a significant percentage of borrowers still owed money on their title loans six months after taking them out, indicating the potential for ongoing financial challenges.

How to get a classic car title loan

Apply

Complete the Online Application. Begin by visiting the lender's website and filling out the online classic car title loan application form. This form will request essential information about your older vehicle, including details such as the make, model, year, and current mileage.
Submit Required Documents. After completing the online application, you will need to provide specific documentation to support your loan request. Commonly required documents include proof of income, proof of vehicle ownership, and valid identification. These documents help the lender assess your eligibility and classic car's value.
Vehicle Appraisal. Sometimes, the lender may require a professional appraisal or inspection of your older car to determine its current value. This step is crucial as it helps establish the maximum loan amount you can secure based on your vehicle's worth.
Loan Approval. Once you've submitted your application and the necessary documents, the lender will review your information. After a thorough assessment, you will be notified of your loan approval and the specific amount you are eligible to borrow. This approval process considers the value of your older vehicle and your ability to repay the loan.
Receive Your Funds. After receiving loan approval, you can expect to receive your funds. This can typically be done by directly depositing your bank account or receiving a check. In some cases, if you are in need of immediate funds, you may even have access to your money on the same day.

Requirements

Be Able to Provide Proof of Income / Alternative Income. You must demonstrate your ability to repay the loan. This can be done by providing income proof, including pay stubs, bank statements, or even tax returns.
Have a Title to a Qualifying Classic Car in Your Name. You must possess a clear title to a qualifying classic car. This means you own the vehicle outright, with no liens or outstanding loans against it. The classic car should have an appraised value of $6,000 or more.
Be at Least 18 Years of Age. Applicants for classic car title loans must be at least 18 years old to be eligible for these loans.
Proof of Residence. You'll need to provide proof of your current residence. This can be in the form of a utility bill, lease agreement, or mortgage statement that displays your address.
Valid Identification. A valid form of identification is typically required. This often includes a driver's license or other government-issued ID.
Photos of the Vehicle. Photos of your classic car are essential. These images help the lender assess the condition and value of the vehicle, contributing to the loan determination process.
Personal References. Some lenders may request personal references as part of the application process.

Additionally, it's important to understand how the value of your classic car plays a significant role in the loan approval process. The resale value of your vehicle is the primary factor in determining the title loan value. Even classic vehicles and older cars with significant mileage can qualify for a title loan if their appraised value is $6,000 or more. The vehicle's value serves as collateral for the loan, and it's essential to have an accurate estimate of this value to maximize the loan amount.

Please note that, in most cases, classic car title loans require an in-person inspection to verify the vehicle's condition, especially for older and classic vehicles with potential mechanical issues. This in-store inspection helps lenders accurately assess the vehicle's value and condition before finalizing the loan approval.

Conditions

Title Ownership. To qualify for an old car title loan, you must own the vehicle outright, meaning there are no outstanding liens or loans against the car. The title should be in your name.
Loan Amount. The appraised value of your old car typically determines the amount you can borrow. Lenders may offer a percentage of this value as the loan amount.
Interest Rates. Lenders charge interest on the loan amount, and these rates can vary. Some lenders may offer competitive interest rates, while others may charge higher rates, so it's essential to compare rates from different title loan companies.
Loan Repayment Terms. Old car title loans usually have short repayment terms, often 15 or 30 days. Borrowers are expected to repay the old auto title loan, including the principal amount and interest, within this timeframe.
Fees. Lenders may charge various fees, such as an origination fee or administrative fees. Understanding all the fees associated with the loan before accepting the terms is important.
Vehicle Appraisal. In some cases, lenders may require an appraisal or inspection of your old car to determine its value. This appraisal helps establish the loan amount.
Default Consequences. It's crucial to understand the consequences of defaulting on the loan. If you fail to repay the loan as agreed, the lender may repossess your old car.

Best places to get classic car title loan

LoanMart is a well-known lender offering car title loans, including those for classic cars. They have a strong online presence and a network of participating stores. It's advisable to check their current terms, rates, and customer reviews to determine if they meet your requirements.
Montana Capital is another lender specializing in title loans. They may provide options for classic car title loans, but it's essential to review their specific terms and conditions, as well as customer feedback, to assess their suitability for your needs.
Cash 1 is a lending institution that may provide classic car title loans. They have multiple locations and offer in-person assistance for those seeking title loans.
Choice Cash is another potential lender for car title loans. As with the other options, it's crucial to examine their interest rates, terms, and customer reviews to ensure they are the right fit for your classic car title loan needs.

Ways to receive the money

Direct Deposit. One of the most common methods is through direct deposit to the borrower's bank account. The lender will require your bank account details, and once the loan is approved, they will transfer the funds electronically. This method is quick and convenient.
Check. Some lenders may issue a check for the loan amount, which borrowers can cash or deposit into their bank accounts. This traditional method may take a bit longer to access the funds compared to direct deposit.
Cash. Depending on the lender's policies and the borrower's preference, it's possible to receive the loan amount in cash. However, this method is less common due to security and convenience reasons.
Wire Transfer. Lenders may offer to send the loan amount via a wire transfer to the borrower's bank account. This method is typically used for larger loan amounts or for borrowers who prefer it.

Things to pay attention to

Maximum Loan Amount (Max Loan). This is the maximum size of the classic vehicle title loan authorized by state law. It's essential to be aware of the limits set by your state to ensure you are not borrowing more than legally allowed.
NSF/Fees. Understand the fees lenders are permitted to charge, including late fees and other charges. Knowing these fees can help you avoid unnecessary additional expenses.
Term Limits. Familiarize yourself with the maximum duration of a car title loan, including any potential renewals or rollovers. Additionally, be aware of any requirements to pay a portion of the loan principal when renewing the loan.
Surplus/Deficiency. Familiarize yourself with any legal requirements regarding the return of extra funds from selling a repossessed vehicle after paying off the title loan, interest, and repossession fees. Additionally, understand whether the lender is permitted or prohibited from suing borrowers for any amount still owed after selling the vehicle.
High-Interest Rates. Car title loans are associated with high interest rates, often at triple-digit APRs. This can significantly increase the overall cost of the loan, so it's essential to consider the interest rates when assessing the loan's affordability.
Risk of Losing Your Car. Car title loans use your vehicle as collateral. If you default on the loan, there is a substantial risk of losing your car. It's crucial to fully understand the repossession and right to cure terms to protect your vehicle.
State-Specific Regulations. Pay close attention to the specific regulations and laws in your state regarding car title loans. Some states have stringent restrictions, while others may have more permissive laws. It's important to know the rules that apply to your location.

How to repay a classic car title loan?

Pay Online. Many lenders offer an online portal or system that allows borrowers to log in and make payments electronically through their title loan account. This method provides a convenient way to manage your payments from the comfort of your own device.
Pay Over the Phone. Another option is to make payments over the phone using a credit or debit card. Many lenders provide a phone payment option, making it easy to handle payments without the need for online access.
Bank Account Payments. Some lenders allow borrowers to set up one-time payments or recurring payments directly from their bank accounts. This automated payment method can help ensure on-time payments, as the funds are deducted as scheduled.
Money Transfer Locations. Certain lenders may accept payments made at participating money transfer locations. You can inquire with your lender to determine if this payment method is available in your area.
Check or Money Order. If you prefer traditional payment methods, you can send a check or money order to the payment processing center specified by the lender. Make sure to include your loan account details to ensure proper crediting of your payment.

Alternatives

Payday loans are short-term loans designed to provide quick cash until your next payday. They are typically small-dollar loans with high fees. Check Into Cash, Advance America, and Speedy Cash are well-known payday loan providers.
Credit unions are member-owned financial institutions that offer a range of financial products, including personal loans and small-dollar loans. They often have more favorable terms than traditional banks. Navy Federal Credit Union, PenFed Credit Union, and Alliant Credit Union are examples of credit unions.
Credit card cash advances allow you to withdraw cash from your credit card. While convenient, they often come with high cash advance fees and interest rates. Most major credit card issuers, such as American Express, Visa, and MasterCard, offer cash advances.
Bad credit loans are designed for individuals with poor or limited credit history. These loans may have more lenient credit requirements but often come with higher interest rates to offset the perceived risk. Upstart and Upgrade are online platforms that connect borrowers with lenders specializing in bad credit loans.
Credit builder loans are financial products designed to help individuals build or rebuild their credit. They work by having borrowers make regular payments into a savings account, and once the loan term is completed, the funds are released to the borrower, often with an improved credit history. Self (formerly known as Self Lender) is a prominent provider of credit builder loans.

Editorial opinion

Classic car title loans have become a financial option for individuals looking for quick access to cash. These loans, also known as old auto title loans, allow borrowers to leverage the equity in their vehicles, including older vehicles, as collateral to secure funds. The process often involves minimal application criteria, quick approval times, and the convenience of applying online.

For many, the appeal of classic car title loans lies in their accessibility. Loans, offered by various online title loans companies, have made it easier for individuals to inquire about loan proceeds and obtain approval within a short time frame. Another aspect that attracts borrowers is the ability to estimate the equity in their cars.

However, it is essential to approach title loans with caution. While they may offer a quick and straightforward process to secure emergency cash, the risk of losing the vehicle, which serves as collateral, is a significant consideration. Borrowers should carefully review the loan agreement, ensuring they understand the terms and are fully aware of the amount they are borrowing. Furthermore, those interested in classic car title loans should weigh the convenience of the process against the potential costs and risks involved. As with any financial decision, it's important to carefully evaluate whether a title loan is the right choice for one's specific circumstances.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.
Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.
Carefully review all the terms and conditions of your payday loan contract.
Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.
Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.
Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.