Car Title Loans and How They Work?

Getting a loan from a conventional source takes time and you have to submit many documents before the lenders consider your case. Moreover, there is a time lag from your application date to the date you finally get access to funds. As such, conventional loan sources don’t work if you need cash in an emergency. In such cases, a car loan can provide quick relief, learn here. A car title loan is like cash title loans, with a car as collateral. It is usually taken out for a small amount of money and for a really short period. To access such a loan, you hand over the title to your car to the lender who keeps it as collateral and lends you the money. This is quick, as there are no credit checks. You pay the lender a fee for letting you borrow money and you need to pay back within 30 days’ time.

How do they work?

You can get a car title loan either online or in a store. You need to follow certain steps and you will be done.

 1. You need your application, your car, the title to your car and your photo ID ready to show the lender. Sometimes you need to drop off the extra set of car keys with the lender.

 2. The lender will look at the make, model and the condition of the vehicle and determine its market value.

 3. If the lender is fine with your document he will approve the loan, keep the title and forward the cash.

 4. After the scheduled time period, usually a month, you can pay back the loan along with the interest or fee.

Before you get any fast cash title loans with the car as security, you must find out certain things.

  • The fees

  • The Annual Percentage Rate

  • The time period for repayment

  • The total cost in dollars

Documents required for car title loans

Also known as a pink slip loan, a car title loan would require certain documents. The borrower must also not have any liens on the vehicle and must own the car outright. The documents required are:

 • The original title of the vehicle showing the ownership

 • Current vehicle registration

 • Government ID matching with the name of the title holder

 • Proof of residency or utility bill that matches with the name of the title holder

 • Proof of ability to pay the loan or pay stubs

 • Names, addresses and phone numbers of valid references

You may also have to deposit a copy of your car keys with the lender. They do not check your credit score as the advance is made on the resale value of your car. The best person who could get a car title loan is one who owns a car outright. If you have an emergency, you can easily borrow $200 or a similar amount to tide over the emergency with a car title loan.
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