If you're in a financial bind and need quick cash, a car title loan can be an excellent option. Specifically, a car title loan allows you to get quick approval for a personal loan, usually without the need for a credit check. Instead, you place your vehicle as collateral. The money from a car title loan can be used for just about anything, from bills and rent to personal expenses.
Before you take out a vehicle title loan, however, there are a few things you need to do.
Check Your Title
Start by making sure that you have a copy of your title and (this is the most important thing) that it is completely free of liens. This means that you need to have paid off your vehicle in its entirety. If you're still making payments on your car, you don't own it outright, and therefore you cannot place it as collateral for a title loan.
Car title lenders have specific eligibility requirements in place that you will have to meet in order to get approved for a loan, aside from having a clean title to your car. In most cases, you will also need to be at least 18 years of age and have a steady income. Be sure you meet the basic eligibility requirements before you apply.
Review Your Loan Terms
Even after having an application approved, it's a good idea to carefully read through the loan terms being offered to you before you sign on that dotted line. This is true any time you're entering into a financial contract. Specifically, you'll want to look for information on your interest rate and how long you'll have to pay the loan back, as well as what will happen if you are late or miss a payment.
Gather Necessary Documentation
Aside from your vehicle title, there is other documentation that you may need in order to finalize your loan and get the check or cash you need. In most cases, you will need a photo ID. Check with your lender to ensure you have everything you need before you go to collect your payment so you can avoid delays.
For many, a vehicle title loan can be a great option to a sudden and unexpected financial problem. Just be sure to follow these steps before you take out a car title loan to ensure the process goes as smoothly as possible.