Car title loans offer access to fast cash while using your car as collateral. Knowing how title loans work increases your chance of getting approved while ensuring you understand the risks involved. At Swift Title Loans, we offer an online application you can complete 24/7, so your funds are ready when you need them the most.
It’s important to understand that you must own a car without any loans to qualify for auto title loans. The car must have enough value to borrow money from while leaving some of its value untouched. Most car title lenders allow you to borrow up to 50% of the vehicle’s value, requiring monthly payments to repay the loan.
How Title Loans Work
You can apply online in about 7 minutes* and find out straight away whether you pre-qualify:
1. Apply for an online title loan
You can complete a title loan application online in about 7 minutes, or call us for assistance. The short form asks about you, your income, and your vehicle to check whether you pre-qualify, with no obligation to move forward. You can also apply at a Swift Title Loans store near you.
2. Gather the necessary documentation
- To get final approval, you’ll need your vehicle title, which must be in your name and lien-free or nearly paid off, plus official documentation to prove you qualify. This includes:
- A government-issued ID, such as a driver’s license, state ID or passport
- Proof of your income, such as pay stubs, bank statements, or award letters
- Proof your address, such as a recent bill, mortgage statement, or voter registration card
- Proof of auto insurance, such as your most recent insurance ID card
3. Upload the necessary documentation
Provide documents to verify your application, including clear photos or a video of your vehicle (all sides, VIN, mileage, and interior), submitted from your phone.
4. Choose the title loan offer
Before making an offer, our team verifies your vehicle’s title and history through the National Motor Vehicle Title Information System (NMVTIS) and confirms its value. If you are eligible, you receive a free, no-obligation offer. Read the full contract so you understand the APR and total cost, the payment schedule, prepayment terms, and the repossession terms if you do not pay, then compare the monthly payment to your budget before you accept.
5. Receive funds
Once you sign, we record the lien electronically through your state’s Electronic Lien and Title (ELT) system, so there is no paper title to mail. If approved, you may receive your funds the same day if your signed documents are in before noon on a business day, usually by direct deposit to your bank account. Otherwise, funds are typically available within one business day.
6. Make payments
You can make your payments online, and there is no prepayment penalty, so paying extra or early lowers the total interest you owe. When you make your final payment, we release the lien electronically through the ELT system, and your state’s DMV updates your record to lien released and sends you a clean title.
Can You Drive Your Vehicle When You Have a Title Loan?
Yes. You can keep and drive your vehicle during the loan, as long as you make your payments on time.
How Much Money Can You Get With a Title Loan?
The amount you can borrow depends on your vehicle’s value, your ability to repay, and state regulations.
What Are the Typical Repayment Terms for a Title Loan?
Your repayment term depends on your state’s law, your loan amount, and your ability to repay, and your state page explains the term the law allows. You can repay early to reduce the total loan cost, and there are no prepayment penalties.
Do Title Loans Affect Your Credit?
Swift Title Loans does not report your payments to the credit bureaus, and applying does not affect your FICO® Score.
Risks to Understand Before Borrowing a Title Loan
Now that you know how title loans work, it’s important to understand the risks involved in borrowing one:
- High interest rates: A title loan is a high-interest loan with rates over 100% in some cases. Be sure you know the total cost of the loan before accepting it.
- Damaged credit score: Missed payments can lead to collections or repossession, and either can hurt your credit.
- Repossession: If you miss too many payments, your car can be repossessed and sold to recover the remaining balance.
FAQ
Are There Alternatives to Title Loans?
Exhausting all alternatives when applying for a title loan is a good idea. For example, if you can borrow from friends or family or get an unsecured personal loan, you may pay fewer fees and won’t risk losing your car. However, a title loan may be a viable option if you have bad credit or don’t have a steady job.
Do You Need Good Credit to Get a Car Title Loan?
Credit score is not the main factor when getting a car title loan, and applying does not affect your FICO® Score. Approval is based mainly on your car’s value and your ability to repay the loan.
What is the Difference Between a Title Loan and Personal Loan?
A title loan is a type of secured loan that uses your car as collateral. A personal loan is usually unsecured, meaning it does not require collateral and is based mainly on your income and credit score.
Final Thoughts
Knowing how title loans work is important when deciding if it’s the right option. Title loans should only be used in emergencies when no other loan options are available. It’s important to exhaust your other options first because they have a high annual percentage rate and fees.
If you decide a title loan is right, complete an online application to see in minutes if you pre-qualify, then decide if it is the best choice for your budget.
