title loan

How Do Title Loans Work

IIf you have the title to a car, truck, motorcycle, boat, or RV you can get a loan against the value of that vehicle. The basic idea of a title loan is easy to grasp, but you might be surprised at some of the details. If you are thinking of using a title loan or need one, this article is an overview of what to expect and why a title loan can be a good option for raising quick cash.

Important Things to Know

When you take out a title loan you are using your vehicle as collateral for the loan. In almost all cases, a lender will expect you to put up some kind of guarantee that the lender will get their money back. The title to your vehicle serves that purpose.

How much can you borrow on a title loan? It depends on the lender, but normally 25% to 60% of the vehicle’s value. So, if your vehicle has a fair market value of $3,000 and you need $1,000, you are probably going to be approved for a title loan. If you need $2,500, the odds of getting that amount with a $3,000 vehicle are pretty low.

You generally need to have a clear title to the vehicle. If you still owe the bank or finance company, a title loan company might still loan money. Check with the individual lender before applying for a title loan with them so you know if you need to start looking for another financing option. You may also need to show proof of insurance on the vehicle.

Common Reasons for Taking Out Title Loans

Title loans are a common way to get quick cash to deal with an emergency. In summary, that is the main reason people get title loans. Emergency medical expenses, emergency home repairs, and even last-minute vacations are reasons why someone might seek a title loan. Many individuals use title loans and payday loans because they are unable to use a bank or credit union. A title pawn Georgia lender will take a vehicle as collateral from anyone and lend them money.

A vehicle title loan offers the owner a way to get some cash for emergencies without worrying about credit and with less trouble than going through a traditional financial institution to get a loan. A title loan can be a viable financing option if you have a clear title to your vehicle and only need a small amount of money.