How Much Can You Get for a Title Loan?
In times of financial crisis, a loan provides a means for dealing with money woes. The hard cash offered by a loan can cover immediate expenses.
At least temporarily, problems derived from those expenses go away. Of course, for this to happen, the borrower must be approved for the loan. The loan amount must deliver the necessary amount of money.
Anyone with bad credit or limited income might find a title loan a reliable way to borrow cash. An important question does come up here. “How much money can you get from a title loan?”
How Title Loans Work
Title loans refer to loans made against the title — ownership document — of a car. As long as no lien exists against the vehicle, a borrower can use the title to secure a loan. Other requirements might be in place as well.
For example, the person may need some source of income. Generally, a title loan becomes easy to process since the car title loan requirements are minimal.
The borrower can even continue to drive around in the car. The vehicle won’t be placed in a garage until the repayment the loan.
Processing an application for a title loan requires specific documentation. A driver’s license becomes necessary to prove identification.
Proof of income such as pay stubs, pension deposits, are required as well. Proof of residence in the form of utility bills or other acceptable documents and proof of car insurance must be presented. If you qualify, you can get a title loan with no insurance.
Not surprisingly, the lender requests the actual title to the vehicle. Photocopies or other duplicate images won’t work. Applicants must present the legal title.
If the title is not available, procure a replacement can from the Department of Motor Vehicles in the state. Requirements vary from state-to-state, but filling out a notarized form and paying a fee usually covers things.
The Loan Amount
Applicants likely wonder how the lender comes up with an actual title loan figure.
A quick look at an online application or a car title loan calculator reveals several factors that contribute to the number. Make, model, year, and mileage, in particular, are among the most important ones.
The loan amount ties in the with the resale value of your car. A lender cannot lend you more money than the car is worth.
Do not assume, however, that there aren’t ways to improve the chances of receiving the maximum amount of the loan.
Taking care of a car, truck, motorcycle, or other vehicle boosts the potential amount of an approved loan. Keeping the car clean and in good condition helps. Dings, scratches, and other imperfections don’t help increase value.
Continually driving the mileage of the vehicle upwards decreases valuation as well. If you have plans for a title loan in the back of your head, try to keep these things in mind.
Please be aware that each state has its own rules regarding title loans. Within the state statutes, there likely is a maximum loan amount. Regardless of the value of a vehicle, the loan amount cannot exceed the state cap.
Rates and Fees
Title loans come with high rates of interest. The actual interest rate varies depending on the lender and any state-imposed interest caps.
A lien fee may be required. A lender may charge processing, origination, and other fees. Costs, like interest rate, vary based on the lender and local laws.