Is a Car Title Loan Appropriate for You?

Find Out If You Might Qualify for a Fast Cash Loan

If you find yourself in a financial bind with no extra funds to get out of it, what can you do? You could ask your friends and family for money, but it’s common knowledge that borrowing from them too often leads to sour relationships. And after all the time you’ve spent working to be as independent as possible, you definitely don’t want to take any steps backward.

Car title loans are a valid option for quickly getting the money you need without relying on your loved ones to bail you out. But this type of loan is not appropriate for everyone, and qualifications can vary by state. Still, it’s worthwhile to look into a title loan if it means you can maintain your financial independence and solve your problems yourself.

You Can Get a Title Loan if You Own Your Vehicle

The first thing you should know when you’re determining whether taking out a title loan is right for you is that you must own your own vehicle to qualify. Title loans rely on your car’s value as collateral, which means you cannot have any liens on your title and must own your vehicle outright.

Most traditional loans hold your credit score hostage and require you to have good credit. Title loan lenders, however, don’t tend to care about your credit score, and only care that you’re able to pay back the loan.

When you apply for the title loan, you will need to provide your original car title. The title loan company will file away your title and return it to you once you’ve repaid your loan. You can, however, keep your keys and drive away in your car after obtaining your loan.

If you do not have your car’s title, or if you have liens on your car’s title, this type of loan is probably not appropriate for you.

You Need Proof of Income

When you apply for your title loan, you’ll need to show proof of income, such as several weeks of pay stubs, or a letter from your employer indicating how many hours you work and your wage. These documents prove to the loan officer that you are making money that you can put toward paying back your car title loan.

If you have a job, you could qualify for a title loan. If you aren’t steadily employed, you likely will not qualify.

You Must Be at Least 18 Years Old

To qualify for a title loan, you must be at least 18 years old. Minors are not allowed to take out a title loan.

The title loan company you visit must carefully adhere to all laws and cannot make an exception for you. So, if you are younger than 18, a car title loan is not appropriate for you.

Your Car Must Be Present When You Apply

Even if you have to tow it there, the title loan company must physically see your vehicle and its title before they can issue you a loan. Some companies will issue a loan even if your vehicle doesn’t run; it’s best to call ahead if this is your situation.

The reason your car must be present is so that the title loan company’s appraisal expert can take a look at it to determine the value. The value, plus your income, are two pieces of information that are necessary for the lender to determine how much money they can let you borrow.

In general, the more valuable your car and the higher your income, the larger the loan you could receive. Most title loans range from about $150 to a couple thousand dollars. However, you should only borrow the amount of money you need, and nothing extra.

If you cannot get your car to the title loan company’s parking lot, you won’t be able to take out a title loan and will need to find an alternative way to get funds.

e Prepared to Pay Interest

Just like any loan, title loans accrue interest. When you apply for a title loan, listen  for information on how interest accrues and the percentage of interest you’ll be paying. You’ll also be given information on when your loan is expected to be paid in full. If you don’t understand, be sure to ask clarifying questions.

Listen carefully so you aren’t surprised by accruing interest. And remember: if you don’t pay back your loan, the Kansas CIty title loans company – or the company wherever you live – can repossess your car.

If you don’t want to pay interest or don’t want to risk a repossession if you don’t intend to pay back your loan, a title loan simply isn’t for you.

Is it Smart to Take Out a Car Title Loan?

Whether a car title loan is right for you is up to you. You are an adult, capable of making decisions about your finances. As long as you understand how a car title loan works and are prepared to pay back your loan, then getting a car title loan can help you with surprise expenses or bills.

Just like any financial decision you may have to make in your lifetime, it pays to be smart!

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