Payday Loans Near Me 550 — Not For everybody

03.03.2023 от lesleecolosimo6 Выкл

Documents You’ll Need

Fees and Rates

Example of a Title Loan

The Bottom Line

Personal Loans, Lending

Car Title Loan Requirements

By Kimberly Rotter

Updated May 14 2021

Review by Thomas Brock

A car title loan is a short-term loan in which the car used by the borrower can be used to secure collateral to the loan. Most of the time, consumers don’t qualify for other financing options.

If you reside in a state that permits car title loans (see States that allow Car Title Loans), here’s the procedure for getting one. The borrower must bring the car along with the necessary documents to the lender. Although some title loan applications are on the internet, lenders must to confirm that the car is in good condition and the accuracy of the documentation before releasing funds. The lender retains the title of the vehicle and places a lien on it, and gives the money to the lender.

The loan limit is generally 25% to 50% of the car’s worth in cash ( The lender pays back the loan with fees and interest in the time allowed (usually 30-days) and is able to claim the title lien-free.1

The most important takeaways

Title car loans are short-term secured loans which use the car that the borrower is using as their collateral.

They are often associated with subprime lending, as they often involve high-interest rates and borrowers with low credit scores. And not all states permit them.

To get the title loan you’ll need evidence that proves that you’re who you are and you own your vehicle, that you’ve earned income, and at least two references.

Sometimes, additional steps are needed to lower the risk for lenders by installing GPS trackers on the vehicle to aid in a possible repossession.

Documents You’ll Need

In order to obtain a title car loan or pink slip loan typically, the borrower has to own the vehicle outright; there may be no liens on the title.1 Lenders also require certain documentation, including each of them:

Original vehicle title showing sole ownership

The government-issued identification matches the name on the title.

Utility bill or other evidence of residence that matches the name on the title

Current registration of the vehicle

Proof of vehicle insurance

Pay stubs from recent pay or other proof of capacity to pay back the loan

Names address, phone numbers and names that are at minimum two references that are valid.

Copies of the keys to the car

Some lenders also require some lenders also require a GPS tracking device to be attached to the vehicle, in case the borrower defaults and the lender wins the right to take possession of the vehicle. Some of these devices allow the lender to deactivate the vehicle remotely.1

You do not need excellent credit score to qualify for a title loan. In fact, the majority of title loan lenders will not look at your credit score at all because the loan is contingent on the resale value of the vehicle. Also, you don’t require employment to be eligible for a Title loan.1

Rates and Fees

Car title loans are considerably more expensive than traditional bank loans. Rates of interest can differ, however in states where the interest rate is not capped typically, it is determined at 25% per month, or 300% annually.2 This implies that a customer who takes out a loan of $1,000 must to repay $1250 at the end of the thirty days in order to avoid default.

Most lenders charge a lien fee. In states in which title lending isn’t controlled, some lenders charge origination charges, document fees processing fees, key fees or other fees.1 These fees can add up quickly, and can amount to an additional $25 (or more) over fees for loan as well as interest charges.3 Make sure you include all fees when figuring the total cost for the loan.

(For more information on this subject for more details, check out: Car Title Loan Limits).

A good example of a Title Loan

Let’s say that Maria was recently laid off from her job and she has to work to pay the bills and make rent. In a last-minute solution, she decides to borrow cash using the car title loan against her car, which has a current market price of $2,500. The loan provider is willing to extend her car title loan worth $1250.

In the process of applying, Maria needs to provide proof of title (that she owns the car) along with additional documentation. The interest rate was advertised as at 20% over the 30 day period of loan, but Maria did the wrong thing by assuming it was already an annualized rate. The true annualized interest rate (APR) was actually 240%! This is much higher than Maria would have accepted knowingly.

At the end of the one month period, Maria was required to pay $1,500 which was significantly more than the roughly $1,270 that she was expecting. In the face of her dire financial situation, Maria was unable to get the additional $230, and was therefore obliged to surrender the title of her car.

The Bottom Line

The most suitable person to take advantage of a vehicle title loan is someone who owns a vehicle outright, understands the potentially expensive cost of the loan and has a reasonable belief that they will have access to the funds needed to pay off the loan before the repayment period expires. If there’s no concrete and realistic strategy to pay off the loan the car title loan could mean selling the vehicle for only a fraction of the value.

A lot of borrowers who take out title loans renew their loans repeatedly, making the financing much more expensive overall. Therefore the most important factor is ability to repay the loan on or before its due date.

(For more information, visit Getting a Car Title Loan.)