Title loans are designed for people who are in need of quick cash for a wide range of reasons like managing debt, paying essential bills, or covering an emergency expense. In some cases, the lenders will not even run a credit check, and you have to produce no income proof. This makes such financial options easy to access, even for people that have a bad credit history.
However, title loans do have some disadvantages. While you may get fast cash, it also means that you will have to shell out high interest. Or else, you could risk losing your asset.
These online title loans are often beneficial, especially in times of emergencies. Using traditional financial institutions takes a much longer time to get approved since many processes are involved. Therefore, a title loan is considered the best option to care for your urgent needs. One of the best aspects about this type is that it’s generally processed and approved on the same day, and you don’t have to provide any mandatory credit score.
What Is a Title Loan? How Is It Different from Other Types Like Installment and Payday Loans?
As mentioned above, a title loan is a high-interest and short-term contract where you need to provide collateral to borrow money. In most cases, the collateral will be your vehicle. If you need to take out money but have a bad credit history, you will have to look into places to accept your low credit score and/or history. Mainly, lenders that will provide you with title loans will not check your credit history. However, there may be other barriers that you may have to face. It will not affect your credit score, too.
Title loans and payday ones bring you high risk. This means that these will have high-interest rates. On the other hand, installment loans have low-interest rates. However, it takes some time for the applications to get approved. Therefore, we can say that bad credit title loans and online payday loans have more in common.
Working of Online Title Loans — Also, What Are Its Common Uses?
You can easily apply for a title loan from any lender if you have a lien-free car title or own your vehicle. You will have to provide proofs like license, car ownership, etc., without a clear title for the application.
So, how do title loans work? Once your application gets approved, you will have to hand over your car title as collateral. While the lender determines the contract terms, you will primarily land terms of a month or 30 days. This means that you will have to make an up-front payment at the end of the contract period. You will have to make the repayments, plus additional fees and interests. Typically, most lenders will charge a fee of 25% of the total amount, which means that the APR (annual percentage rate) will be at least 300%.
Due to such cases, online title loans can become more of a liability. If you cannot repay, you can lose your car as it is the collateral for the borrowed money. Therefore, you need to be very careful when taking a title loan and ensure that you pay on time if you don’t want to lose your car.
Title loans have a lot of common uses. Since they are approved quickly, they are often opted to meet immediate financial emergencies like unexpected medical costs, loss in business, home improvement, etc.
What Are the Fees and Costs of Car Title Loans?
In most cases, these will involve additional fees, increasing the overall cost of the borrowed amount. If you cannot keep up with the repayment, you can very well choose to roll the amount over to a newly extended maturity period. In such circumstances, the new amount will involve a higher interest rate and additional fees. The additional fees and costs will vary from one country to another.
What Are the Average Interest Rates of Auto Title Loans?
The average interest rates are regulated by consumer protection laws depending on the nations and the jurisdictions. Some places will limit the auto title loans that can be charged, while others allow the borrowing companies to charge their own rates.
When not repaid within a short time, title pawns can charge very high interests. Therefore, it’s crucial to understand how the interests are calculated. If you repay your borrowed amount within a short time, you will have to pay fewer interest rates and vice versa.
What Are the Minimum and Maximum Amounts You Can Borrow for an Online Title Loan?
Typically, you can borrow up to 25% to 50% of the total value of your vehicle. Accordingly, this means that the average amount you can borrow is roughly $100 and $5,500. However, there are also quite some lenders that can lend you online title loans amounts like $10,000 or more.
What Are the Requirements and Steps to Apply for a Title Loan Online?
To obtain a title loan, you will have to own the vehicle. There should be no liens against the title. Additionally, you require some documents and paperwork, like:
- Papers that prove that you’re the sole owner of the said vehicle;
- ID card issued by the government that matches the name of the title;
- Proof of residency like a utility bill;
- Registration papers of your current vehicle;
- Insurance of the vehicle;
- Proof of ability to repay the auto title loan, like proof of income;
- Phone numbers, addresses, and names of two valid references;
- Working copies of the vehicle’s keys.
What Is the Step-By-Step Method to Get a Title Loan Online?
Yes, you can get a title loan online. Here are the steps for getting a title loan online:
- Determine how much you want to borrow
- Compare the APRs (Annual Percentage Rates)
- Prepare the requirements and paperwork
- Complete the online application form
- Bring your car to the physical office of the lender
- Read the contract
One of the first things you need to know is the amount of money you want to borrow. This is also known as the principal and doesn’t include the interest and the fees. All this can be done completely online.
If you are a beginner, it is important to compare the APRs. This will give you a rough idea of the cost of the borrowed amount. Depending on the place where you live, the APR should not be more than three digits.
You will have to present a lien-free title, which means that your car should not have any outstanding loan. The title needs to be clear, and the car should be under your name. The lender will also check your driver’s license.
Once the above-mentioned formalities are done, you can now start filling in the online application form. You will have to provide some basic information like contact details, email address, name, etc. Once you submit the online form, the lender will get in touch with you.
Before the application gets approved, you will have to bring your vehicle to the lender. No vehicle inspection is needed. The lender will check the car’s condition to dictate the amount.
Before agreeing to anything to get a title loan online, you must read the contract. Also, pay close attention to the APR. Look at the breakdowns of the other charges as well, as the documentation and processing fees.
What Are the Alternatives to Title Loans?
Some alternatives to a title loan include the following:
- Payday loans
- Unsecured personal loans
- Bad credit loans
- Paycheck advance
- Assistance from non-profit organizations
These are also short-term options that need to be repaid within two to four weeks. The difference is that you will have less risk of losing your car with these than title loans.
As you can guess, personal loans are unsecured, unlike title loans online. This means that you will not have to worry about losing your assets, like your car. Additionally, these have lower fees and interest rates.
Apart from car title loans, you can also opt for bad credit loans. Bad credit title loans are the next best alternative because they have low-interest rates. While you may have to make a direct deposit of the asset, the lender will not check your credit history and/or score.
A paycheck advance is almost similar to payday ones. This type is perfect for people that have no or bad credit scores. However, the bad aspect here is that you will have to pay a high-interest rate.
Several non-profit organizations allow you to take loans for immediate emergencies. In most cases, you will not have to provide any collateral to opt for the borrowed money. Additionally, the options also do not have a high-interest rate. Alternatively, you can also ask for help from your friends and family.
The Best Instant Online Title Loans
America Cash provides car title loans ranging between $100 and $8000, depending on the residing state. You can apply for a title loan online or in-person and will mostly get approved within a day, no matter the location. However, you need to ensure that the terms and amounts of the borrowed amounts will vary from one state to another. Hence, you must check the information about the instant online title loans before you can apply for them.
While AmericashPaydayLoans.com is relatively a newcomer, it has become a competitive financial company within a few years. It has the largest network of online direct lenders in all states. So, it is always possible to take title loans online with instant approval near me, wherever you may reside. All you need to do is visit the closest branch.
Here are some FAQs you may want to know.
How Long Does It Take to Get a Title Loan?
A title loan is almost similar to a payday loan – it is a small option that is provided for a short amount of time, in most cases, a month. Until you repay the borrowed amount, the lender will have the title of the asset. These require no credit check, which is why the application process does not take more than 15 minutes to 45 minutes.
Can I Have Two Title Loans on the Same Car?
It is possible to have two contracts at the same time as long as the vehicles are different. Additionally, the car also needs to be registered under two other family members. Depending on the state restrictions, the instant online loan cannot be applied for the same car.
Can You Get a Title Loan if You Are Still Paying on Your Car?
In the most general cases, you can apply for it while you are still paying for your car. There are several reasons why a vehicle does not have to be repaid entirely before its title can be used as collateral. A car title loan is a part of the equity on the borrower’s vehicle, not the remaining payments they are supposed to make.
How to Pay off a Title Loan Fast?
Generally, it is always in your best interest to pay more than the minimum amount when you can. This way, you will accrue lesser interest on your title loan online. However, you also need to be careful. Some lenders will tack on early payoff fees. Hence, it is essential to read the terms and conditions carefully.
Can I Refinance My Title Loan?
Yes, you can refinance your online title loan. By refinancing your amount, you will be able to ease your time during a personal financial difficulty or tough economy by adjusting the repayment rate based on your current requirements and needs. If you want to refinance, you must have at least a basic understanding of the processes related to refinancing.