A car title loan is a quick, short-term loan where your car title serves as collateral. You hand over the title to the lender and repay the loan in installments with interest. Once repaid, you get your title back and fully own your car again.
These loans have a simple online application process, often provide same-day funds, and can approve you even with a bad credit history.
Key Takeaways
- A car title loan is a short-term secured loan that uses your car title as collateral to obtain funds.
- To get a car title loan, you must have a lien-free car title with your name on it to give to the borrower.
- You can drive your vehicle while repaying the loan, but it may be repossessed if you do not pay the loan.
Essential Requirements for Auto Title Loans
Every lender is different, but in accordance with the law and state regulations, there are specific documents that you must have:
- Lien-free Car Title: You must own the car outright, with no outstanding loans or other liens against it. The title must be in your name.
- Proof of Income: This could include salary, social security benefits, inheritance, or worker’s compensation.
- Valid ID: To verify your identity, you must provide a valid ID, such as a driver’s license, passport, or state-issued ID.
- Proof of Residence: Some states require proof of residency in the state where you are applying for the loan.
- Car Registration: Lenders may want to ensure that your car’s registration is current.
- Car Insurance: Since the car is collateral for the loan, lenders often require proof of insurance.
- Pictures of the Car: If applying online or by phone, you may need to provide photos of the car for the lender to inspect.
Title Loan Rates, Interest & Fees
Car title loans usually have higher interest rates compared to bank loans, ranging from 25% to 300% across the United States. Some states have rate caps to prevent excessively high rates.
These loans are generally more expensive than traditional loans because lenders take on more risk by offering loans to individuals with poor credit.
Additionally, there may be hidden fees associated with these loans.
Common Fees Include:
- Lien fees
- Key fees
- Origination fees
- Processing fees
- Document fees
It’s important to consider these fees when calculating the total cost of the loan. While some lenders may have hidden fees, we do not. We encourage you to review your agreement closely before proceeding to ensure the loan is the right choice for you.
Car Title Loan Example
A borrower, Abby, owns a car in her name. She needs money urgently for an emergency but doesn’t get paid for another week. To get the funds quickly, she uses her car title to take out a loan for $500 with an interest rate of 25%.
Abby applies before 2 p.m. on a business day and receives her $500 within a few hours. She leaves her car title with the lender. The loan terms require her to repay the loan in full by her next payday.
When Abby gets paid, she repays the lender $625, which includes the original $500 she borrowed plus $125 in interest. Once she repays the loan, she gets her car title back.
Lender Tip: Use a Title Loan Calculator
Before taking out a car title loan, use a title loan calculator to estimate your total repayment amount. This tool helps you understand the full cost of the loan, including interest and any potential fees, so you can make an informed decision and ensure it fits within your budget.
How to Apply for an Auto Title Loan Online
We offer a convenient and quick, completely online car title loan application process. Here is how it works.
1. Prepare Your Documents
Make sure that you have all of the necessary requirements.
2. Submit the application
Fill out our simple car title loan request form to get a free quote.
3. Approval and funding
Once you get approved, you can get your money.
Frequently Asked Questions
Can I Get a Title Loan Without Bringing My Car in Person?
Yes, you can obtain a car title loan without showing your car in person. If you apply online or by calling, you may be asked to share detailed photos of the interior and exterior of the car, but you don’t need to show the actual car physically.
How Old Do You Have to Be to Get a Car Title Loan?
You must be 18 or older to get a title loan.
How Can I Get a Title Loan if I’m Unemployed?
You can get a car title loan even if you are unemployed. To get a car title loan, you must show that you have income, but that income does not have to be a salary. It can also be other types of income, like worker’s compensation or social security payments.
What Are the Normal Repayment Terms for a Title Loan?
The loan term for a title loan typically lasts around 36 months, but it will vary depending on your state. Check out our state pages for specific information on your location.
How Do Title Loans Work in Arizona?
In Arizona, car title loans use your vehicle’s title as collateral. You apply, and the lender appraises your vehicle. If approved, you receive the loan amount and the lender places a lien on your title. Once you repay the Arizona car title loan, the lien is removed and you regain full ownership.
What Is the Smallest Title Loan You Can Get?
The smallest title loan is usually around $100. Our loans usually range from $500-$50,000. The amount of your loan will depend primarily on your car’s value and your ability to repay the loan.
