How to Get a Car Title Loan in 5 Steps

An astounding 78 percent of the workforce lives paycheck to paycheck. If you’re one of them, you know that there are times when coming up with the money to pay rent and put food on the table feels almost impossible.

During those lean times, taking out a loan is always an option. However, choosing the right loan for your needs can be tough and if you don’t have great credit, qualifying for a loan in the first place might not happen.

Car title loans give you a way to get money quickly without having to rely on your credit score. Here’s how to get a car title loan so you can cover those surprise expenses now.

1. Make Sure You Own Your Car

Car title loans give you to borrow money without taking out a traditional loan from a bank. The lender uses your car as collateral, meaning they’ll take possession of your car if you fail to repay the loan.

Since your car secures the loan, lenders are more willing to approve applications from people with lower credit scores. After all, they can recoup the amount of your loan by selling your car if you default.

However, to apply for a title loan, you’ll need to own your car outright. If you financed the car, the loan should be fully repaid. If you’re borrowing the car from someone, they’ll need to be the ones to apply for the loan.

You must have a clean title that proves you’re the owner of the car. It should also show that no other lenders have a claim on that car.

If you don’t own the car outright, you’ll want to look into other loan options.

2. Shop Around

As with all loans, different car title loan providers will offer different loan terms. The best thing you can do is shop around and get quotes from several lenders in your area.

Each quote will outline the terms of the loan including your interest rate, repayment time table, and how much you’ll receive for your car. Keep in mind that you likely won’t receive the full value of your car when you take out a title loan.

Instead, lenders will offer you a set percentage of your car’s value. This allows them to make their money back if you fail to repay your loan in time.

Take the time to compare the quotes in detail. It’s best to choose a lender that offers the lowest interest rate and the best principal amount.

Once you receive the money, you’re free to use it however you see fit. According to this post, you can use car title loans to pay bills and even to get rid of outstanding debt.

3. Get Your Documents in Order

After deciding on a lender, you’ll need to gather up your documents. These documents will help the lender verify that you’re the owner of the car and can apply for the loan in the first place.

You’ll need your car’s title, a government-issued photo ID, a piece of mail with your address on it, and proof of your income.

Your most recent paystub will work just fine. If you have more than one job, bring pay stubs from each job so the lender has a clear idea of how much you earn each month.

The more you earn, the easier it will be for you to make payments on time and the better terms your lender will likely offer you.

If possible, take pictures of the car, too. Remember, the lender needs to verify that the car matches the one listed on the title.

4. Accept the Loan and Sign the Paperwork

Once you find a lender and compile your documents, you’re ready to accept the loan. The lender will expect you to sign paperwork showing that you agree to the terms and detailing what they expect you to do to repay the loan on time.

After you sign the paperwork, the lender will become a lienholder on the title. Once you pay off the loan, your title reverts back to your name only.

Keep in mind that throughout the repayment process, you’ll keep possession of your car at all times. You’ll still be able to use it to commute to work, run errands, and take trips.

5. Make a Plan to Pay It Back

As soon as you accept the loan, start thinking of how you’re going to repay it in full by the end of the loan term. If you don’t, the lender can take possession of the car and you’ll be without a way to get where you need to go.

Consider setting aside money from each paycheck to settle your debt. If you need your employer to automatically deposit a set amount into a different account so you can’t spend it, update your direct deposit statement.

The important thing is that you make payments on time, every time. This will help you avoid late penalties and ensures that you get to keep your car in the long-run.

Is an Auto Title Loan Right for You?

Auto title loans are a great alternative to traditional personal loans or paycheck advances. Since there’s no restriction on how you can use the money, they’re ideal for people who just need a little extra cash to get through tough times.

However, the loans often have high interest rates which can put a strain on your budget. The best thing you can do is only borrow what you need rather than the maximum amount the lender approves you for.

This will save you hundreds in interest costs alone over the life of your loan.

Now You Know How to Get a Car Title Loan Fast

If you’ve been wondering how to get a car title loan, this guide will help you navigate the process quickly and easily. Just remember to do your due diligence. Research the lenders you’re considering working with and get quotes from several companies before you make a decision.

This way, you’ll be sure to get the best loan terms possible.

Looking for more tips and tricks to help you get through those financially lean times? Check out our latest posts.