Title Loans - How to Get One Despite Bad Credit


With car title loans, lenders can provide quick emergency funds for borrowers with bad credit. It is usually given for a pink slip that you must put up as collateral. If you fail to make the necessary repayments on schedule, your car and its title become the property of the lender.

A pink slip loan is similar to pawning an item, except that many lenders allow you to keep your vehicle while making repayments. Pawn brokers, on the other hand, typically hold on to their collateral until the debt is repaid.

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Getting a Title Loan with Bad Credit

Typically it is people with bad credit who opt for a pink slip loan. Most lenders will run a credit check prior to distributing any funds, but bad credit is not usually a deterrent for most lenders because the debt is secured by auto equity.

In order for you to qualify for a title loan, you must own the vehicle being used as collateral and the vehicle must be paid off or nearly paid off. You'll need to show proof of ownership as well as your repayments on the car loan before you qualify.

The lenders you choose may also consider your employment status and source of income when determining approval. They will usually offer you from 25 to 50 percent of the car's wholesale value.

How Much Is Your Car Worth?

Before you apply for an auto equity loan, you should estimate the wholesale value of your used car for yourself. The Kelley Blue Book (KBB) is a popular resource to determine a used car's value. This research tool lets you search for your car's make, model and year as well as add the appropriate options to get the vehicle's value.

The trade-in value (sometime equal to the wholesale value of the vehicle) will be the most instructive value when approaching a lender because they will factor in this calculation to determine how much they can afford to lend you. Estimating your vehicle's worth will help you ensure that you can borrow the maximum amount possible on your car equity.

Use a Title Loan to Improve Your Credit Score

Title loans are secured because the lender is not at risk of losing any money. By repossessing and selling your car the lender can cover the debt if you default on your loan payments. However, as most lenders report to all three credit bureaus, borrower's bad credit worse, defaulting on title loans. Consumer groups recommends being careful, when you are using a title loan to improve your credit.

When you apply for a title loan make sure you have a plan to use the funds wisely and pay back the loan on schedule as per the terms in the loan agreement. Making payments diligently can reflect positively on your credit report and help you improve a low FICO score. Often one of the reasons that subprime borrowers take title loans is because it can help them improve their credit score.

By applying for online for title loans in California, Oregon, Arizona, and New Mexico, you can get cash they need easily. Most top lenders will allow potential borrowers to input all of the information need for approval on their website. Consequently, you may get approved almost instantaneously in many cases.

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