Six FAQs Regarding Title Loans

When people are considering taking out title loans, it is common for them to have a lot of questions. These loans can be much simpler to get than other types of loans, especially bank loans. Since you’ll be using your vehicle as collateral for the loan, it is a simple and fast way to get the cash you need, especially for unexpected expenses such as to replace an appliance or for car repairs. Below are some of the frequently asked questions regarding this type of loan.

#1. How Much Money Can I Borrow with This Type of Loan?

The amount you can borrow will vary from company to company; however, most loan companies offer customers a percentage of the value of their vehicles. For instance, many companies lend you between 25% and 120% of that value, although other companies may lend you more. In addition, many of them place a maximum amount on what you can borrow, such as $10,000 or $15,000.

#2. Does the Title Have to Be in My Name?

In order to take out title loans, the vehicle must be in your name. In other words, only the person whose name is on the vehicle’s title is legally allowed to borrow the money. This means that if you wish to borrow the money, your name must be on the title of that vehicle.

#3. What Types of Titles Are Accepted by the Loan Company?

In most instances, only vehicle titles that are clear or lien-free can be used to take out this type of loan. In other words, if you’re still making payments on your car, you likely won’t be able to take out a title loan. There are exceptions, of course, so if you’re still paying for your vehicle and would like to use it as collateral for a loan, your local loan company may be able to accommodate you.

#4. May I Continue to Drive the Car While the Loan Is Being Paid Off?

Yes! This is perhaps one of the biggest advantages to car title loans because you can still drive your vehicle while the loan is being paid off. Keep in mind that the loan company will place a lien on the vehicle’s title in case to protect against default. However, if this doesn’t happen, you’ll be able to keep your vehicle the entire time.

#5. Can I Qualify for the Loan Even If I Have Bad Credit?

Since the loan amount depends mostly on the value of your car, the loan company won’t consider your credit score heavily, which means that you can take out one of these loans even if your credit is bad. This is a godsend for people with less-than-perfect credit scores.

#6. Can I Qualify for the Loan Without a Driver’s License?

A driver’s license is not always required for title loans; however, you will definitely need some form of government-issued identification that includes a photograph. In fact, any ID card that includes a picture of you can be used to identify yourself so you can get your loan money.

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