On average, over 17 million vehicles sell each year.
If you’re one of the many millions of Americans who own a car, you might be considering getting a loan. Maybe you need extra cash to pay for an emergency fast, or perhaps you need the money for bills. Whatever the case, it’s important you understand car title loan requirements before you dive in.
What Is a Car Title Loan?
Sometimes called a pink-slip loan, a car title loan is a short-term loan. This type of loan uses your vehicle as collateral. The loan usually comes at a high-interest rate. You can learn more here.
What Do You Need for a Title Loan?
If you’re trying to secure an auto title loan, then there are several requirements you have to meet. The lender will want to verify the condition of your vehicle and review your submitted paperwork before they release the loan to you. If approved, the lender keeps the title to your car, places a lien against it, and gives you money that must be repaid (usually within 30 days).
You must own your vehicle in order to qualify for a car title loan. There cannot be any liens already against the vehicle’s title.
Here are some of the requirements you must meet when applying for a car title loan:
1. Vehicle Title
Your vehicle’s title must prove your ownership. The title should list your name as the sole owner. If your title doesn’t list your name, you’ll likely be rejected.
Government-issued identification is necessary when applying for almost anything, and a car title loan is no different. Documentation like your driver’s license will work well as proof. The name on your ID should match the name listed on the vehicle’s title.
3. Proof of Residency
Another document you’ll need is some form of proof of residency. This could be something like a utility bill. The name listed on your proof of residency must match the name on the title.
4. Proof of Vehicle Insurance
You will also need to provide proof that you have current insurance on the vehicle. The name on the insurance must match all the other documentation. If your insurance has lapsed, get it renewed before trying to apply for a car title loan.
5. Vehicle Registration
It’s illegal to not have a vehicle registered that’s being actively driven. The tags on your vehicle should be up-to-date. You’ll need to make a copy of your current registration form to submit with the loan application.
6. Proof of Income
Lenders want to be assured that you’ll be able to repay your loan plus the interest. That’s why many lenders will require a GPS tracking device to be attached to your vehicle in case you default and they must repossess the car. You’ll need to submit pay stubs or some other proof that you have the ability to repay the loan.
7. Vehicle Keys
Most lenders require copies of the vehicle’s keys. This is in case the lender must repossess the car.
When you submit your application, you’ll likely need to include at least two references. The information you submit should include their names, phone numbers, and addresses.
Know Your Car Title Loan Requirements
We hope this article on car title loan requirements proved useful. If you’re in need of fast cash, then this type of loan may be what you need. However, be sure to do your research and know if there are any hidden fees when figuring the total cost of the loan.
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