How Do Auto Title Loans Work?

By Author: Stam Bett
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Auto title loans have received a great deal of attention in the last few years as millions of consumers in the United States are facing credit problems after the recession. When an emergency comes up and you have no cash in your savings but own your car, an online title loan may be just the thing to dig you out of the hole and get your life back on track. Title loans are easy to qualify for and promise money in under one hour. So, how do they work exactly? Let's take a look.

Three Steps to Get Money
The process begins with an online application that takes under three minutes to complete. Once you're approved, a representative will call you back and visit you to deliver the money and have you sign the additional paperwork. The paperwork they require is usually just a copy of your driver's license and other easy to acquire documents, including proof of residency (which may be junk mail or a phone bill), personal references and proof of income.

What are Title Loans?
Title loans are fairly short-term secured loans and the amount you receive is based on your vehicle's value, not your credit history. ...
... You can qualify for anywhere from $500 to $25,000 and get the cash in your hand in under one hour. Because your credit won't be a problem and this is a secured loan, a lien is placed on your car until you pay back the loan. While it's possible to have your vehicle repossessed if you can't make payments, remember that this is incredibly expensive for lenders and they prefer to just work with you and offer you an extended loan term if you're having trouble. Less than 1% of title loans result in repossession.

Do I Qualify for a Car Title Loan?
To get an online title loan, you must be a legal resident of the United States and over the age of 18. You must own your vehicle in full or owe very little money to qualify, as the lien must be placed on the car. Bad credit title loans are the norm so having credit problems in the past will not disqualify you for a loan when you need money today. Title loans are based on the equity in your car, which is why you must own it completely or uwe very little. You'll also need to have steady employment and make at least $800 per month after taxes to show you can pay the loan back.

The bottom line is bad credit title loans are within reach of most people and this type of loan is a great alternative to pawning your valuables and allowing your utilities to be disconnected or bills go unpaid. Title loans have a bad reputation in the media, although this is largely undeserved as they provide a source of emergency money to millions of people who can't qualify for a loan from a bank or traditional sources. If you have poor credit and you need money today, consider a title loan to help you get back on your feet.

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