Can I Still Get a Title Loan If My Car Is Financed?
Need quick funding and have a financed car? You may be wondering if you can get a title loan. A title loan is a type of secured loan that allows you to use your car as collateral in exchange for a sum of money. Typically, your car needs to be paid off or close to paid off to obtain a title loan. It is possible to get a title loan with a financed car. But, there are some things you need to know before you get a title loan while making payments on a car.
How Can a Financed Car be Used as Collateral for the Loan?
The process to get a title loan on a financed car may be slightly different than if you owned the car outright. When you get a title loan, the lender will hold onto your car’s title until the loan is paid off. The lender will add a lien to your car’s title after the loan proceeds are sent out. If you are trying to get a title loan on a car that has not been paid off yet, that means there is still a lien present on your car’s title from the current lienholder.
This can be a bit of a hurdle, as the lender will need to work with both you and the lienholder to secure the loan. However, it is possible to get a title loan while you are still making payments on your car if you meet the lender’s requirements. The requirements for a title loan (whether you are still making payments or not) often include the following:5
- Have a Car Title in Your Name and a Vehicle With Enough Positive Equity
- Be Able To Show You Can Make Payments on Your Loan Through Pay Stubs, Bank Statements, or Other Acceptable Documents
Even if you are still paying off your car loan, your vehicle will have enough positive equity to qualify as collateral for the loan if its market value exceeds the amount you still owe. In addition to the items mentioned above, you will need to provide other paperwork, like proof of residence and recent pictures of the car if it will be appraised online. If your car meets the criteria for the loan and you provide the right documents, you can get a title loan on a financed car! The lender will ask you to sign a few forms that allow them to pay off the remainder of the loan on your behalf.5
What You Need to Know Before Taking Out a Title Loan on a Car Not Paid Off Yet
Before taking out a title loan with a financed car, there are a few things you should consider:
- Interest rates: Title loans typically have higher interest rates than traditional bank loans or personal loans, which means they will cost more to pay off.4
- Repossession: If you default on a title loan, the lender has the right to repossess your car.
- Credit score: Title loans may not require a credit check, but defaulting on the loan can have a negative impact on your credit score.
Note: While there are drawbacks to consider before you apply for a title loan on a financed car, you can work to avoid many by paying your loan on time and comparing your loan options before you sign on the dotted line. One of the perks of getting a loan with the help of Max CashⓇ is that we have a network of different lenders, so finding the most advantageous option with convenient loan terms doesn’t have to be a hassle!2 4 5
Should I Get a Loan Against My Car If It’s on Finance?
Ultimately, whether a title loan is right for you will depend on your individual circumstances. If you are in a financial bind or emergency and need quick cash, a title loan may be a viable option. However, it’s important to carefully consider the potential risks and drawbacks before committing to a loan against your car.
If you do decide to take out a title loan while you are still making payments on your car, be sure to shop around and compare offers from different lenders. This will help you find the best deal that fits your financial situation.4
As mentioned above, it is possible to get an auto title loan with the car not paid off, but make sure to read through the terms and conditions to fully understand the repayment process.4 5
If you are eligible for a title loan while still making payments on your car, you can expect a streamlined process and convenient access to cash when you need it most! Best of all, you can keep driving your car while you make payments on your loan, and bad credit isn’t an issue.5
Where Can I Get a Loan Against My Car If It’s on Finance?
Depending on your state of residence, you can typically apply for a title loan on a financed car in person, over the phone, or online. Generally, getting a loan online can be a lot more streamlined than in person! When you start your application online or over the phone, you can conveniently skip an in person car inspection and get your car’s value appraised online instead.
Get a Title Loan on a Financed Car with Max Cash®
Apply for a title loan today with the help of Max Cash!2 5 That way, you do not have to shop around by yourself. We do the hard work for you! Get connected to a network of verified lenders through Max Cash and find out if your income and vehicle qualify for the cash you need.5
Frequently Asked Questions
Whether you need to bring your vehicle in for an inspection to secure a title loan depends on the specific lender’s requirements. Inspection Options for Title Loans
In-Person Inspections: Some title loan companies will ask you to bring your vehicle to their office for a direct inspection.
On-Site Inspections: Alternatively, more accommodating lenders may offer to send an inspector to your home or workplace, sparing you the inconvenience of travel.
Photo Submissions: Lastly, some companies simplify the process further by allowing you to submit detailed pictures of your vehicle instead of an in-person inspection.
Conclusion
Each lender has different procedures for vehicle valuation, so it’s crucial to understand all your options and choose the one that best fits your convenience.
When considering a title loan, understanding your vehicle’s equity is crucial. Equity represents the portion of your car that you genuinely own, free of any loan obligations. Here’s a straightforward way to evaluate it:
Determine Current Market Value: Find out how much your car is worth in the current market. This can be done through various online valuation tools or by consulting with a dealership.
Calculate Outstanding Loan Balance: Check how much you still owe on your auto loan. This information is usually available through your loan provider or on your most recent loan statement.
Compute Your Equity: Subtract the outstanding loan balance from the car’s current market value. For example, if your vehicle is valued at $12,000 and you owe $5,000, your equity would be $7,000.
By knowing your vehicle’s equity, you can better understand how much collateral you have, which is a critical factor for securing a title loan.
Understanding the importance of consulting with lenders before applying for a title loan on a financed car is essential for a few key reasons. Firstly, lenders have varying policies, and not all are willing to accept a financed vehicle as collateral. This means some lenders might outright reject your application if your car isn’t fully paid off.
Furthermore, certain lenders might be prepared to pay off your existing loan and then provide a new loan based on your car’s title. But this isn’t a universal practice, and knowing which lenders offer this service can save you time and headaches. Speaking with potential lenders ahead of time can also help you understand what documentation and requirements you’ll need to meet.
In summary, by consulting with lenders about eligibility first, you can identify those who align with your specific situation, thereby increasing your chances of securing the loan while avoiding unnecessary rejections.
When considering title loans, the criteria differ significantly from traditional loans. Here’s a clear breakdown of what you’ll need:
Vehicle Ownership:
Your car’s market value is the primary factor. If you own a vehicle outright or have a significant amount of equity in it, you’re on the right track.
Proof of Income:
A reliable source of income is crucial. Lenders want to ensure you have the means to meet repayment terms. This doesn’t necessarily mean you need a high income, just consistency.
Identification and Residency:
You’ll need valid identification, such as a driver’s license, and proof of residency. This verifies your identity and location for the lender.
Traditional factors like credit scores and long employment histories are less critical here. Instead, the emphasis is on your vehicle’s worth and your ability to repay.
When you need cash fast, title loans offer an expedited solution that can be astonishingly quick. Often, unforeseen expenses like medical emergencies, unexpected repairs, or sudden bills demand immediate attention. Luckily, with a title loan, you can typically get the funds you need within the same day you apply. This swift access to cash ensures you can tackle your financial challenges without delay, providing peace of mind during urgent situations.
Quick Access to Cash
One of the primary advantages of title loans is the speedy access to funds. Whether you’re facing an unexpected medical bill, urgent home repair, or any other financial emergency, title loans provide a swift solution. Often, you can get the money you need on the same day you apply, allowing you to tackle pressing expenses without delay.
Easier Eligibility Requirements
Traditional loans can be challenging to obtain due to stringent eligibility criteria, such as high credit scores and stable employment histories. Title loans, on the other hand, prioritize the value of your vehicle. As long as your car has sufficient equity and you can demonstrate a reliable income, you have a good chance of qualifying.
No Credit Check Needed
For individuals with less-than-perfect credit, title loans offer a significant benefit: there’s no need for a credit check. This feature makes title loans a viable option for those who might not qualify for other types of financing. Additionally, repaying a title loan on time can positively impact your credit score, offering a path to financial improvement.
Flexibility in Use
Title loans come with the flexibility to use the funds however you see fit. Unlike some loans that require the money to be used for specific purposes, title loans give you the freedom to address your unique financial needs, whether they are personal or business-related.
In summary, title loans offer quick access to cash, lenient eligibility requirements, and no credit checks, making them a practical option for many facing financial challenges.
