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, you visit a friendly branch near you, talk with our team in person, and walk out with the funds you need.
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 for a title loan within a few minutes, and get an answer instantly:
1. Visit your nearest branch
You can visit your nearest branch or call us at (888) 557-7115 to get started. Our team asks about you, your income, and your vehicle to determine eligibility, right there in person.
2. Gather the necessary documentation
- To get final approval, you’ll need official documentation to prove you qualify for the loan. 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. Choose the title loan offer
If you are eligible, you may receive a title loan offer based on the information you provide. Review the loan amount, interest rate, and fees, and compare the monthly payment to your budget to determine what you can afford.
4. Bring your documents and vehicle
Bring your documents to the branch and drive your vehicle in so our team can take a quick look at it (all sides, VIN, mileage, and interior) during your visit.
5. Receive funds
Most title loan approvals let you receive funds the same day you visit and are approved, especially if you stop by before early afternoon local time. If not, funds are typically available within one business day after final approval.
6. Make payments
Title loans are short-term loans that you repay monthly. Your loan agreement will detail the minimum payment required, the due date, and how to make your payments.
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?
Repayment terms are usually 12 to 36 months, depending on your loan amount, state regulations, and your ability to repay. You can repay early to reduce the total loan cost, and there are no prepayment penalties.
Do Title Loans Affect Your Credit?
Title loans may affect your credit, depending on how the account is reported. Making on-time payments can help, while missed payments may have a negative impact.
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: You may hurt your credit score if you miss too many payments.
- 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. A credit check may be performed, but there is no strict minimum requirement. 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, visit your nearest branch or call us at (888) 557-7115 and get a fast decision in person to determine if it’s the best choice for your financial needs.
