Before applying for online title loans, you have to know a few things to avoid being screwed or losing your car ownership. If you fully understand title loans, you will make the right decision in applying for one.
At the end of reading this article, you will fully understand and have a clear answer to the following;
- What are online title loans?
- How to apply for title loans?
- How much can you get for a title loan?
- Can you get this loan with bad credit?
- Pros and Cons of this type of loan
- And the best online title loans to consider.
Without taking much of your time, let’s digest this informational content.
What are online title loans?
Online title loans are money you borrow from an online lender with your property title document as collateral. Before taking up a title loan, you must submit the original ownership document(title) to the lender. This title can be from properties you own like a car, boat, trailer, or motorcycle.
When you submit the original title of your property to the lender, you give them the right to place a Lien on your property. A Lien is a right for the lender to own your property if you don’t repay the loan. Although your property will remain in your possession, you don’t have full ownership until you repay the title loan.
How to apply for online title loans?
It is straightforward to apply for title loans if you have met the requirements of the particular lenders. Most title loans are dependent on your source of income, the current value of your car, motorcycle, trailer, or boat. Below is what you need to get fast cash against your collateral;
- You need an Active Checking account.
- Proof of income
- Valid Identification
- Must be 18 years or older
- Must be a citizen or legal resident
- Most importantly, you need the original title of your car, motorcycle, boat, or trailer. The title must be in your name.
You can drive to the lender’s physical location, submit the requirements, and walk away with the cash you need. OR, you could also complete the application process online and have the money in your account within an hour or two. In my opinion, the online option is better if the lender is a bit far away.
How much can you get for a title loan?
To know in advance how much you can expect from the lender, you could use a title loan calculator. This way, you see the range you should bargain with the lender. It is vital to know beforehand because lenders will always want to give you less than what they should offer.
Most lenders will offer you between 25% to 50% of the total value of your collateral. So there is really no fine print on exactly how much you can get for this type of loan. That is why you might want to use a loan calculator.
Can you get title loans with bad credit?
Yes! You can get title loans with a bad credit score. Although most traditional lenders prefer to work with borrowers with excellent credit, other lenders don’t care about your credit. Most online lending platforms will match you with a credible lender in less than no time, irrespective of your credit score.
As long as you meet the basic requirements, you will get your cash in just a few hours. The essential requirement is the title of your car, boat, trailer, or motorcycle. As long as this title is in your name, lenders won’t hesitate to give you the cash you need. But make sure you have a reasonable repayment plan. Otherwise, you could lose your property if you default.
Pros and cons of online title loans
Although title loans can help you solve a situation you might have, you should know the advantages and disadvantages. Knowing the pros and cons of these types of loans will help you make an informed decision on whether to take them or not. So let’s start by exploring the pros.
Pros:
You get the money fast:
The most significant benefit of online title loans is that you get the cash you need in less than an hour. You only have to complete an online or in-store application in most cases, and your money will be in your account. Although the loan is much less than the value of your property, at least you can quickly solve your problems.
Little to no credit check:
One of the main reasons people apply for online title loans is that it is much easier to get. Since the title of your property is the collateral, most lenders don’t care that much about your credit score. So even with bad credit, you can still quickly get title loans. So if you have exhausted all your borrowing options, this loan type could come in handy.
Still in Possession of Your property:
Just like a home equity loan, you continue to use your car, boat, trailer, or motorcycle. Since the loan collateral is just the title of your property, your physical property remains in your possession. Note that you can only continue to keep your property after repaying the loan. If you default, the lender will seize your property and sell it to regain the loan.
Convenient Payback Scheme:
Most reliable title loan lenders will offer you a convenient repayment scheme. You can repay the loan in multiple installments. This scheme is fantastic because you can effectively budget your expenses without defaulting on the loan. You can repay title loans in numerous installments, unlike payday loans ➔ that you have to pay all at once.
As impressive as the benefits of getting title loans are, you should also be aware of the disadvantages. Let’s explore these disadvantages below.
Cons:
You could be in a debt trap:
Title loans can put you in a debt trap. If you can’t repay this loan on time, your next option could be to take up another title loan to repay the old one. This repayment option is dangerous because you could be in debt for months after your initial borrowing.
Your asset is at risk:
Although you continue to use and enjoy your car, boat, trailer, or motorcycle, you could quickly lose it if you default. Since the lender has placed a Lien on your collateral, they can seize and sell this collateral to regain the title loan. You can avoid this by staying on top of your repayment to prevent an extensive debt period. Try to forgo certain expenses until you repay the loan.
Higher Interest Rates:
Just like payday loans, title loans have a high-interest rate. The tricky thing about title loans is that you might be in hot water if you don’t repay in 30 days. Although some lenders will offer you between a 10% to 25% interest rate, you could end up paying over 200% in APR. So try as much as you can to repay your loan within 30 days or less.
Despite the cons of title loans, some lenders offer the best online title loans. Let’s take a look at these top reliable lenders.
Best online title loans
Since most title loan lenders don’t have your interest at heart, it is often difficult to find a reliable one. The best online title loans are from lenders with the following attributes; Convenience, how fast, repayment flexibility, any credit score, and interest rates.
Convenience:
It is easy to apply without visiting the lender’s location. As long as you have the required documents, you can complete the application process online in the comfort of your home. If you have a computer, laptop, or even your mobile phone with an internet connection, you are good to go.
Faster Loan Approval:
The best lenders will quickly process your application and transfer the loan amount into your bank account. This process can take as little as 45 minutes to complete. Once you submit the correct paperwork online, you are good to go. You can quickly take care of the emergency you have.
Flexible Repayment:
Most title loan lenders will immediately come after your property if you default. So the best ones are those who offer you a better and flexible repayment scheme. If you default ones, they might let that slide and try to work with you to make sure you get back on track with repayment.
Any Credit Score acceptance:
Although the main requirement is the title of your property, most lenders are comfortable working with borrowers of excellent credit. But the best online title loans are from lenders who will lend you money even though you have a bad credit score.
Low-Interest Rate:
This attribute is the most important when it comes to online auto loans. If you fall into the wrong hands, you will be in a nightmare by paying outrageous interest rates. Good lenders offer a low-interest rate on title loans. xxx
Bottom Line
Online title loans offer a quick and accessible financial solution, especially for those with limited credit options. However, it’s vital to approach them with caution due to their high-interest rates and the risk of losing your vehicle.
As with any financial commitment, carefully consider your ability to repay and explore all available options to ensure a decision that aligns with your financial health and goals.
