Title loans are a type of secured loan where the borrower’s vehicle is put down as collateral in exchange for a loan. Title loans can have different names. Auto loan, pink slip loan, car title loan, all of these sound very different but they all mean the same thing. Despite the different names for title loans, they all involve a similar process, and most of the time have the same qualification for getting a title loan.
Common Names for Title Loans
- Car Title Loans
- Auto Title Loans
- Car Title Pawn
- Auto Pawn
- Pink Slip Loans
Most of these differences occur simply because of dialect. A pink slip is another word for the title of a vehicle. In some states they are called “Pink Slip Loans,” while other states they are called “Auto Title Loans.” Whatever a person calls these loans they mean the same thing, and so the process for them works in a similar way.
The Process of Getting a Title/Car Title/Auto Title Loan
The first step in getting a car title loan is making sure to have a vehicle that is in safe, working condition. If a person has more than one vehicle, it is a good idea to let the lender know about all of them. Keep in mind that generally a person can only take out one title loan at a time and cannot combine the value of their vehicles. Once the details are figured out for the vehicle(s), the lender will ask for a few things. Generally, in order to get a title loan this information is needed:
- Government Issued I.D (Driver’s License, Passport etc.)
- Proof of Residency (bills, a copy of a lease or mortgage, etc.)
- Proof of Income (Paystubs, Invoices, Bank Statements etc.)
- Pictures of The Vehicle(s) (the lender will give specifics)
Once these pieces of information are gathered, the lender will figure out eligibility in a few ways; they will carefully evaluate a vehicle’s value, monthly income will be looked, along with the borrower’s ability to pay back the loan.
Importance of Interest Rates
When looking at how much will be paid back on a title loan it is important to look at the interest rate being charged. This includes both MPR – Monthly Principal Rate and the APR – Annual Percentage Rate. For car title loans the interest rate can be extremely high so it is a good idea to be informed about the exact amount being paid before committing to a contract. One reason that interest on title loans is so high is because lenders do not take into account credit history.
Will Bad Credit or Bad Credit History Impact Eligibility?
In the traditional loan process, bad credit can negatively impact a person’s ability to get a loan. These types of loans fall under the category of an unsecured loan – This is a type of loan where the lender does not have any type of security if the borrower cannot pay back their debt. Common types of unsecured loans are credit cards or payday loans. The convenient thing about car title loans is that if a person has bad credit it may not impact their eligibility. This is because a car title loan is a secured loan – this is a loan where the lender has some type of security in case the borrower is not able to pay the lender back. Another common example of a secured loan is a mortgage. Taking out a car title loan may even help a person build credit.
Max Cash Title Loans
Max Cash Title Loans is a free service that connects people with lenders all across the United States. We make it quick and easy for people to find a lender that may work with them. All of our lenders are trusted sources, and we can filter through them to see which ones will fit a borrower’s specific situation. To get started get into contact with us:
- You can send us a text or give us a call at: 855-561-5626
- You can send us an email for more information at: info@maxcashtitleloans.com
For more information on the title loan process check out our information page. Here we have answers to commonly asked questions regarding car title loans.
Title loans can have several different names, however they all mean the same thing. A title loan involves having a qualifying title for a vehicle and then using it as collateral for a loan. A title loan may be a good option for people who have bad credit or bad credit history. Lenders ask for some basic information from the possible borrower, this includes ID, proof of income and proof of condition of a vehicle. Before signing up for a title loan it is important to review exactly what it will cost. After doing all this, finding a lender who will work with different financial situations is important. Using Max Cash Title Loans can drastically narrow down the search for a lender and a great deal on a car title loan5.