Unexpected financial emergencies are the worst. Whether you are dealing with the inability to pay medical bills or other unexpected expenses, you need a solution to your financial issues. For some consumers, that solution might be a car title loan.
A car title loan is a short-term loan that allows a borrower to use their vehicle’s title as collateral in exchange for funds. You can use this financing option if you are looking for an easy way to get money without having a good credit score.
According to the Better Business Bureau (BBB), more than 80 locations in the Dallas area offer title loans. However, many of these companies are not BBB members and have poor ratings. However, Texan Credit Corporation is a BBB member and has an A- BBB rating. Caution is advised when selecting a title loan company.
While the exact loan amount varies depending on your lender and vehicle, the loan limit for a car title loan is usually between 25-50% of the vehicle’s current market value. In addition, many lenders have a dollar limit on how much you can borrow, even on a high-value vehicle.
Be mindful when applying for a car title loan since interest rates are high. Interest rates vary but are generally set at 25% per month. If possible, look for a loan that can be paid off in installments.
Although you can apply for a title loan online, you still have to take your vehicle and the necessary documentation to the lender’s shop to verify the vehicle’s condition and your documents.
The lender will keep your vehicle’s title until you repay the loan. Once the final payment is made, you reclaim your title. On the other hand, if you default then the company can repossess your car. For that reason, be sure that you can afford to pay back the loan.
Lenders need some or all the following documents to release funds:
- Original vehicle title showing proof of ownership
- Valid government-issued ID that matches the name on the title
- Valid and current vehicle registration
- Contact details and references
- Proof of vehicle insurance
- Proof of residency matching the name on the ID and title
- Copies of the vehicle keys
- Proof of your ability to repay the loan
Getting a car title loan may sound like it needs a lot of paperwork, but it can provide needed funds for those who have poor credit and need cash quickly. That’s because funds are usually released the same day. And, in many cases no credit check is necessary.
