Unexpected expenses rarely pop up when it’s convenient. Sometimes borrowing money from friends and family or getting a traditional loan aren’t an option. In times like those, people often consider getting a car title loan. Does your car need to be paid off to use it for a car title loan? Read on to find out, and to learn more about the basics of car title loans. If you have any other questions, reach out to Max Cash Title Loans; we are happy to help answer any questions that you have.
Can I Get a Car Title Loan if my Car Isn’t Paid Off?
That depends. If your car isn’t paid off, that means there is a lien on it, held by whoever you owe money to. And you can only have a single lien against a piece of property, because no one will let you use your car as collateral if you’re using it for another loan already.
However, your car title loan lender may still be able to help you. Depending on how much you owe on your car, your lender might be able to give you a large enough car title loan to cover whatever emergency expense you’re facing and finish paying off your car. This would allow you to resolve your first lien, have a clean title, and then place a lien on it for your new lender.
What Else Do I Need for a Car Title Loan?
In addition to a qualifying car title in your name, you’ll need to assemble a number of other documents. Some most important ones are:
- Photos of your car (front, back, and sides)
- Proof of Income
- Proof of Residence (Certain pieces of mail)
- Government-Issued I.D. (Driver’s License, State I.D., Passport, etc.)
It’s important to note that while some car title loan lenders permit you to submit photos of your car in lieu of an in-person inspection, other lenders do not. To borrow from these lenders you’ll need to bring your car down to their brick and mortar location for an inspection.
What Can I Use for Proof of Income When I Get a Car Title Loan?
While it is very common for people to use a recent pay stub as proof of income for a car title loan, it’s hardly the only thing you can use. Some other common things used to demonstrate the ability to pay for a car title loan are:
- Worker’s Compensation
- Child Support
- Social Security
How do I Get a Copy of My Car Title?
If you’re missing your car title, you’ll need to get a new copy from the DMV. You may even be able to get them to expedite your duplicate car title to you, normally for a fee. Max Cash Title Loans may be able to help you find the nearest DMV capable of rushing your car title loan to you. In certain circumstances, we may even be able to assist you directly with your new car title. If you’re able to add your lender as a lien-holder at that time, it may speed up your car title loan process.
Are There Hidden Fees in Car Title Loans?
There shouldn’t be hidden fees in a car title loan if you are using a reputable lender. Instead, they do their best to create clear, easy to understand loan agreements, and give borrowers straightforward answers to any questions they may have about the title loan process. They don’t include things like balloon payments, which are enormous payments that fall into borrowers’ laps at the end of their loans. Similarly, they don’t include prepayment penalties; they don’t punish borrowers for trying pay their loan back early3. Be sure to read your loan agreement carefully and ask the lender questions about anything you don’t understand.
How Much Can I Get for a Car Title Loan With my Car?
The amount of money you can get for your car will depend on a few different things. The most important ones are:
- Value of your car
- Your monthly income
- Length of the loan
The value of your car is what determines the absolute maximum amount of money you can potentially borrow with a car title loan. Lenders determine the value of your car by taking a variety of factors into consideration, for example, the mileage, make and model, condition of the interior and exterior, year, etc. Your monthly income is used to calculate the amount of money you can afford to pay back each month. And finally, the length of the loan determines the size of the monthly payments. You should note that some states restrict the lengths of car title loans, which can impact the size of the monthly payment.
What Happens if I Can’t Pay Back My Car Title Loan?
If you find yourself struggling to keep up with your car tile loan payments, it’s vital that you get in touch with your lender. Borrowers who fail to keep up on their payments can have their car repossessed. While the repossession process varies from state to state, it does tend to follow a general pattern. When a borrower defaults on their car title loan, their lender may be required to send them a right to cure notice. This is to inform them that they have a limited grace period during which they can repay the entire balance of their loan. If they fail to do so, their car becomes eligible for repossession by the lender.
Once the repossession is complete, the lender will likely auction the car to attempt to recover their money. At this point, the relationship between the lender and the borrower may be at an end. In some states however, lenders may continue to seek payment from borrowers if the proceeds from the auction don’t cover the remaining loan balance. In other states, lenders must return any excess money over the remaining balance.
If you need a car title loan, you shouldn’t assume you can’t get one because your car isn’t paid off. Your lender may be able to give you your emergency money and enough to finish paying off your car. If you need help with starting the title loan process or have any other questions reach out to Max Cash Title Loans, we are happy to help1.