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Car Title Loans: The five things to know before you get one

One can wonder about what is a car title?

 It is a secured loan that helps the borrower use the car as collateral. Since your car stays against the loan repayment, the lender can repossess the car if you don’t pay the loan on time.

Title loans are generally high-interest loans. They are short term loans. If an individual has a credit score, you can also qualify to get a title loan.

A title loan can become a headache for you if you cannot repair the loan amount in a stipulated period. It will cost you your car as it serves as the collateral against your loan.

How do title loan work? The fast approvals and the easy application process are the two factors for getting car title loans. But before calling a title loan, there are certain things that you must consider.

  • Own a vehicle

The car title to your vehicle becomes the collateral in a car title loan. It means you need to have a car of your own to qualify for the loan amount. Lenders who would provide you with the loan amount won’t take your word if you don’t have your vehicle. The individual in need of a car title loan needs to provide a clear vehicle title for their car during the loan application process. The car title must include your name on it; otherwise, the application will be on hold

  • The loan amount depends on the vehicle’s value

Of course, you are not going to get a value that is higher than your car value. The loan amount will be lesser than the value of the collateral. That is why the loan amount depends on the value of the vehicle. Other factors like your current income impact the loan amount. For this reason, during applying, the lender might need to check proofs of your employment or income.

  • No check for credit score

Yes, a credit score is not the most crucial factor that comes into consideration when the lender provides you with a title loan. The credit score would not affect your eligibility in any case. The lender would not check your credit score either. That is why people with low credit scores can get title loans quickly.

  • Use the vehicle

Once your car title loan gets approved, the lender wants to take your vehicle away. You can still have access to your car and continue to use it. Therefore even if you take out a car title loan, this will not affect your ability to take your vehicle on a ride.

  • Decide how to spend your money.

Car title loans do not have rigid rules or regulations. The lender of the title loan would not ask you to do things. But before you opt for a car title loan, make sure you go through the terms and conditions.


There are five things that one needs to consider while getting car title loans. Before you sign on the dotted lines, make a formal and visible agreement with your lender to start the application process.


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