If you’ve ever been in a situation where you need emergency cash and your credit cards are maxed out, chances are that the only way to get it is by getting a car title loan. Car title loans can be an extremely helpful tool for those who need money quickly and don’t have any other options. With just one call, qualified borrowers can usually get approved right away and receive their funds as soon as tomorrow.
However, there is such a thing as too much of a good thing, so people should think twice before they impulsively go out and take out this type of loan without considering all the consequences first. These loans come with high-interest rates and if you miss even one payment or allow your account to go over the limit, you can lose your car.
Car title loans are perfect for people who have a steady source of income but for one reason or another need emergency cash to cover unexpected bills or expenses. Wondering how and when to get a car title loan? Check below.
The Amount of the Loan Should Not Exceed the Value of the Car
The lender wants to be sure that they are going to get their money back, so they will only lend money to those who have a clean title, no matter which state you reside in. If you don’t have a clean title, the lender will not be able to give you title loans in Phoenix for example, because if you cannot make your payments, their only option will be to repossess the car. If they can’t repossess it, then there is no collateral and they can’t give you a loan.
The amount you ask for should not exceed the value of the car. The lender needs to know that if you default on the loan, they will be able to repossess your car in return. If you ask for more than the car is worth, there may not be enough value in it to cover the rest of the loan. This means that if you miss one payment or go over your limit, the lender won’t have anything to take.
You Need to Own a Car to Qualify
The first thing you need to know is that in order to qualify for a car title loan, you must actually own the vehicle in question. You can’t just borrow your friend’s car for the week and expect to get a loan using that as collateral. The lender wants to be sure that they are able to repossess the car if you don’t make your payments, so they need to have some form of ownership over it. The lender needs to be able to take possession of the car if you can’t make your payments, so they need to be able to legally own it.
You Have a Steady Source of Income
In order to be approved for a car title loan, you also need to have a steady source of income. This is because the lender wants to be sure that you will be able to make your payments on time. They don’t want to loan you money only to have you default and lose your car. If you’re wondering how and when to get a car title loan, one of the first questions the lender will ask is about your job. They need to know that you have some form of income or else they probably won’t consider loaning you money in the first place. So, if you’re employed, have a pension or other regular form of income, and can prove it, you’ll be able to get the loan.
You Must Have a Clean Title and Good Credit
You need to also have a clean title. This means that there can’t be any liens or judgments against the vehicle and that the car is not currently in a state of repossession. If the car is not currently in a state of repossession, then there should be no other liens against it. If the lender can’t take possession of the car, they can’t really loan you money using it as collateral.
Although it’s not a requirement, having good credit will make it easier for you to be approved for a car title loan. This is because the lender wants to be sure that you’re a low-risk borrower and that you’re likely to make your payments on time. If you have good credit, the lender will take this into consideration when deciding whether or not to approve you for a loan. If you have bad credit, the lender may still approve you for a car title loan, but they will most likely charge you a higher interest rate.
Getting a car title loan is an easy way to get out of tight financial situations. If you’re considering getting one, it’s important that you know the ins and outs of this type of financing before signing on the dotted line.
