Emergencies happen. You never know when bad luck strikes, and you have a major unexpected expense.
About 40% of Americans would struggle to come up with the cash for a $400 expense. If you find yourself in a similar situation, and you need cash for expenses, you don’t need to struggle.
Did you know that you can use your car’s title to get a quick loan? A car title loan is a popular method to get cash in an emergency.
How can you get a car title loan? Follow these tips to get approved for a title loan.
1. Prove You Own the Car and Can Repay the Loan
Car title loans work a little differently than regular bank loans. With a car title loan, you have to show that you’re the owner of the car by giving the lender a clean title.
In other words, if you lease a car you won’t be able to get a car title loan.
If you own the car, but still have auto loan payments, you may not be able to get a car title loan. Technically, the bank that gave you the auto loan owns the car until the loan is paid off.
If you don’t have the title or lost it, contact your local DMV to order a new copy of the title.
2. Meet the Requirements
Lenders have minimum requirements to get a car title loan. You have to be at least 18 years old, show that you have the income to pay the loan back, and have a government-issued ID. Some lenders also require proof of residency, like a utility bill as well.
3. Look for a Lender Close To You
The amount of money that you can borrow with title loans depends on the value of the car. The amount you can borrow is anywhere from 25% – 50% of the value of the car.
The lender will want to inspect the car before you’re approved. That’s why it’s important to choose a lender that’s convenient for you.
4. Know the Value of Your Car
Before you go to a lender’s shop, you want to get an inspection of your car and know what the fair value is. Look at resources like the Kelley Blue Book and research other cars for sale in your area.
You want to make sure that your car is worth matches what the lender says so you can qualify for the right amount of money.
5. Repay the Loan On Time
This is going to be the most important part. You got the car title loan by putting up your car as collateral for the loan.
If you fail to repay the loan, you can lose it. About 20% of borrowers default on these loans, and you don’t want to be one of them. Just pay the loan back on time.
Don’t think that you can avoid the repossession folks by putting the car in a garage. Lenders are smart, and they’ll put a tracking device in the car.
A Car Title Loan Can Give You Cash Quickly
It’s easy to feel like you have no options available when you’re in need of cash. A car title loan is a good way to get money when you need it most. Do your homework and get your paperwork together to make sure you qualify and find out how much you can borrow.
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