A Closer Look at Car Title Loans
If you see ads that ask questions like "Need cash in a hurry?" and "Do you own a car?" most likely those are ads for car title loans. Car title loans also called auto title loans or just plain title loans are short term loans that give you cash in exchange for your car title. If you need extra cash and you are interested to try this loan option here are some important things that you might want to know.
Where can I get a car title loan?
A car title loan is an alternative finance service not offered by banks. They are offered by loan stores that often offer other non-bank lending services. There are thousands of such companies in different states all over the country.
How do I qualify for a car title loan?
You have to be at least 18 years old and just like what the ads say, you have to own a car to be able to qualify for this loan. What the lender requires is a clean car title to secure the loan. If you purchased your car thru a car loan and you still have not fully paid for it yet your car title even if it is issued in your name by the Department of Motor Vehicles is not a clean title and therefore cannot be used as the collateral for a car title loan.
How much cash can I get from a car title loan?
Your car's market value or its Kelley blue book price determines the amount of loan you can get. Usually the maximum loan amount is anywhere from 40% t0 60% of the car's value depending on the car's condition and some other factors. You have the option to borrow just the amount you need or the maximum amount.
What interest rates apply to car title loans?
Car title loans like other short term loans have high interest rates. Usually interest rates are from 20% to 25% per month which when converted to APRs would be equivalent to astoundingly high three digit APRs. There are loan stores that would just allow you to pay for the interest each month and the principal in full later. There are also lenders that would require you to pay for part of the principal plus the interest. Although the latter would be harder to raise each month at least you are slowly paying for the principal.
Car title loan repayment periods vary from lender to lender. There are lenders that give borrowers a few months to settle full amount while others have longer repayment periods that can even reach 45 months. Just remember that longer repayment periods mean paying more for the loan.
Where can I get a car title loan?
A car title loan is an alternative finance service not offered by banks. They are offered by loan stores that often offer other non-bank lending services. There are thousands of such companies in different states all over the country.
How do I qualify for a car title loan?
You have to be at least 18 years old and just like what the ads say, you have to own a car to be able to qualify for this loan. What the lender requires is a clean car title to secure the loan. If you purchased your car thru a car loan and you still have not fully paid for it yet your car title even if it is issued in your name by the Department of Motor Vehicles is not a clean title and therefore cannot be used as the collateral for a car title loan.
How much cash can I get from a car title loan?
Your car's market value or its Kelley blue book price determines the amount of loan you can get. Usually the maximum loan amount is anywhere from 40% t0 60% of the car's value depending on the car's condition and some other factors. You have the option to borrow just the amount you need or the maximum amount.
What interest rates apply to car title loans?
Car title loans like other short term loans have high interest rates. Usually interest rates are from 20% to 25% per month which when converted to APRs would be equivalent to astoundingly high three digit APRs. There are loan stores that would just allow you to pay for the interest each month and the principal in full later. There are also lenders that would require you to pay for part of the principal plus the interest. Although the latter would be harder to raise each month at least you are slowly paying for the principal.
Car title loan repayment periods vary from lender to lender. There are lenders that give borrowers a few months to settle full amount while others have longer repayment periods that can even reach 45 months. Just remember that longer repayment periods mean paying more for the loan.
