If an unexpected expense comes up and you need money immediately, online title loan could be a real lifesaver. You can easily apply for one of these loans right from home. You will know right away about getting approval or not and the other great feature is that you will get access to the money very quickly. But, you must clearly understand how they function and what you will need to get online approval for a car title loan
Car title loans use your vehicle as collateral against the loan and they are considered secure loans. In a nutshell, the lender will take your car if you miss payments. Below you will find out everything you require to get a title loan and what the online requirements are.
Secured Value: Car title loans are usually capped at 25% to 50% of the cash value of the vehicle. When the lender inspects your vehicle, you will have a more accurate percentage.
Length of Loan: A new can be financed for up to 6 years; however, car title loans are for very short-term situations, for 30 days in most cases. They can be extended a number of times, but this is a costly option.
Interest Rate: Pay close attention to the cost of the title loans online. You often pay more for short-term credit. Even in states where there is a cap on interest rates, title loans can get costly. Interest rates max out at 30% a month in places where there are no limits. For instance, if you get a $1,000 loan, in 30 days you will have to repay $1,300 plus fees.
Fees: There are fees in addition to the interest rates on title loans. Some lenders charge a lien fee as high as $30, plus document, processing, key, originating fees etc. With these additional fees, you might be paying an extra 20% to 25% of the loan.
Title loans online are usually secured; therefore your credit history isn’t critical. In most situations, most lenders don’t even look at your credit score or credit history for approval purposes. Look for your credit score and apply online for a title loan. Some lenders don’t even ask for proof of employment, so getting approved for these loans seems fairly easy. There are a few additional things you will need and you will find the most common ones below.
Although your credit history isn’t a deciding factor and even employment in some instances, you might have to provide proof that you can repay the money. They also need a guarantee that they can get the car without too much hassle if you default on the payments. So, in an effort to protect themselves, lenders might ask for some of the following:
Title: The car has to be paid off in full and the title has to be the original title. Additionally, there will need to be only one owner and that is the person who will get the loan.
Registration: A current registration in the title owner’s name.
Proof of Insurance: Title and registration must match the primary person insured.
Government Issued ID: No exception to this and it has to match the name on the title.
Proof of Residency: A bill, usually utility that proves your address. Again the name must be the same as on the title.
Keys: If the vehicle has to be repossessed, you have to hand over a working set of keys.
Valid References: A minimum of 2 people, including their name, phone numbers and addresses.
Proof of Ability to Repay Loan: Bank records, paychecks etc.
Even before you start to apply for these loans, be sure you have all of these documents handy. There are still a few more things to consider. Before you get any money, the lender will need to verify your car’s condition. You might also have to attach a GPS unit to your car, in case they need to repossess if you default on payments. Know that some of these models can actually stop your car remotely!
Only use car title loans for the shortest time period allowed and you should only use them if you are certain you can repay the loan in the given time period. If you constantly renew your car title loan it is just like selling your vehicle for a fraction of what it is worth. These loans can be effectively used by someone who owns their car outright and needs cash right away. Getting an online title loan is quick and easy because it can all be done on the internet in just a few clicks.