Your vehicle is likely to be hugely important in your life. It allows you to get from A to B, to work and to school. It is also a financial asset and if you need money fast, you could use it as collateral to get some money. For many, this is a better option than selling it, as this would mean you can no longer use your vehicle for anything. Using your vehicle as collateral is done through a title loan and you can apply for title loans online. But how do you apply, and how do you get approved? Let’s take a look at the process.
Step 1 – Find a Loan Company
This will take you the longest of all. You need to find a company that offers good rates and has an excellent reputation. There are a few searches you can do to make sure you’re not becoming a victim of some sort of financial scam. Unfortunately, while the industry is regulated, it is still too easy for companies to trick customers out of their money.
Step 2 – Compare Rates and Loans
One of the most important things to look for is the most affordable loan interest rate. Whenever you borrow money, you will have to pay back that amount (the loan principal), as well as interest. Interest is how lenders make their money. These rates vary from one provider to another. However, they are often very high with title loans and you need to find the one that is the most affordable. Generally speaking, the worse your credit rating is, the higher your rate will be as well.
Step 3 – Make Sure You Meet the Minimum Requirements
Exact requirements for title loans vary from one company to the next. However, commonly, you will have to prove that:
- You are the registered owner of a clear title.
- You are over 18.
- You have a regular source of income.
- You are a permanent and legal resident of this country.
- You have a bank account.
Step 4 – Apply for the Loan
When you apply online, you will usually have to provide a number of details that will enable the company to check your credentials. Sometimes, you will have to fax a few pieces of paperwork as well, but this is becoming increasingly uncommon.
Step 5 – Receive the Money
In most cases with title loans, you will receive the money within 24 hours of applying. Some even guarantee same day payments. Once received, you can spend the money in any way you see fit, which is also a difference with other loans, where you often have to indicate what you will be using it for.
Step 6 – Pay the Money Back
Finally, you will have to meet your repayments. With title loans, you absolutely cannot default on your payments, because your vehicle will immediately be repossessed. This is also why you should only apply for one of these loans if you are sure that you can pay it back.