If you're in need of cash for just about any reason but don't have the credit (or the time) to go through the process of obtaining a traditional unsecured loan, then you may want to explore a title loan as an option for getting the financing you need quickly and easily. Specifically, a title loan refers to a type of loan that is secured by your vehicle title or, less commonly, a real estate title. This title essentially acts as a collateral for your loan.
As you prepare to apply for a title loan, there are a few things you should know to ensure the application, approval, and repayment process goes as smoothly as possible for you.
Consider the Value of Your Vehicle
Start by comparing the value of your vehicle (or real estate) with the amount of money you need to borrow. You'll want to make sure that the current value of the title is at least equivalent to the amount you need to borrow, because title lenders will generally not approve applicants for more than the title value. If you're thinking of putting a vehicle title up for collateral, you can get a better idea of its current value by looking at the Kelly Blue Book.
Make Sure You Have a Clean Title
Speaking of your vehicle title, keep in mind that your title will need to be free and clear of any liens in order to take out this type of loan. This means that you may not be eligible for a title loan if you're still making payments on your vehicle or real estate. If you recently paid it off, you may need to visit your local DMV in order to receive an updated title with liens removed.
Review Your Loan Terms and Interest Rate
Before you sign on the dotted line, carefully read through the proposed terms of your loan to make sure you're comfortable with them. This includes not just the repayment period, but the interest rate as well. Make sure you can comfortably afford to pay the loan back in time; otherwise (as with any type of loan), you'll be accruing large amounts of interest and potential penalties/late fees.
Overall, title loans can be a great option when you need to borrow money quickly and without hassle. And by keeping this information in mind as you prepare to submit your application, you'll be in good shape to get approved.