Online title loans are a factoring loan given to you through dealerships. They are short term in time, though payment plans may last much longer than that. You will take out short term money in the form of a special Title Loan. This needs to be paid off with car sales or another suitable form of financing.
How do Online Title Loans work?
If you need an online title loan, all you need to do is contact one of our dealerships. Your information will be given to our lenders, who will then put the loan process in motion. They will determine if they can work with you and then send your specific application to a lender from one of the major auto funding institutions. The lender will approve or deny the loan instantly, based on a decision they use for all title loans. If it is approved, within 5 minutes of the approval email, a check will be mailed to the dealership processing your loan. The check will be immediately deposited into the dealership’s account. You will then take the next step in approving the purchase of your car. Title loans are ideal for poor credit people who need fast cash for emergency expenditures, such as medical bills or rent payments. Title loans are quick and easy. You get to keep your vehicle as collateral while still being able to take a test drive and negotiate a fair purchase price.
One good thing about getting a title loan is that you do not need any paperwork normally required in other lending environments. As long as you have a vehicle in your possession, you can qualify to get a title loan. The vehicle needs to be worth at least $2,500, and the lender will only use up to 80% of the value of your vehicle when figuring out the loan amount. For the lender to buy the car from you, they will require a clean title. You can’t have a lien on your car through the bank or another lending institution. Proof of income can also include employment records and payment records or paperwork from the Social Security Administration or disability checks.
Online Title Loans Terms and Fees
Online title loans usually come with the following terms and fees. As you can see, they are similar to payday loan charges because online title loans are known as short term loans. As the name “Title Loan” implies, the lender uses your vehicle as security against your debt. A Title Loan is a loan in which a lien is put on your car until it is paid off. This means the lender can repossess your car if you do not pay back what you owe. There are specific laws about title loans. They have to be at least $2,500 and aren’t allowed to rise over $10,000. The interest rates that online title lenders charge on these loans are very high because they do not risk not getting their money back. For an online title lender to become operational, they must have a license issued by the banking department in that particular state, just like any other form of lending institution. These lenders also have to meet certain other regulations, based upon where you live in the United States. These include proper insurance coverage for their employees and their clients, adequate security measures like bulletproof windows and panic alarms/buttons, and insurance protection of both your institution and the property of the online title lender. Many online title lenders charge all types of fees, including late payment fees, return check fees, application fees, processing fees, and some fees that you may not expect to occur, such as credit report fees or collateral transfer fee-fees.
Risks of Online Title Loans
There a balance in online title lending. You are offered convenience and speed of application, but the trade-off is typically steep borrowing costs. The annual percentage rates (APR) on title loans average between 300 and 400 percent, putting people at risk for serious financial trouble. Some online title loan titles are higher than others, and fees typically add up to around $50 per $100 borrowed. Title lenders may also charge a fee to the borrower if they miss an installment or make a partial payment, and some charge additional fees just for using their loan. For example, the website describes an APR of “up to” 400 percent that makes exceptions for those who want to renew a two-year loan after only making one initial year’s payment on a balloon payment. Still, then the site says renewal charges will amount to 16%, as well as additional fees for any partial payment or missed due date.
Benefits of Online Title Loans
The main benefit of online title lending is the convenience factor. People do not need to leave their homes to apply for or get cash advances. Online title lenders can also make fast decisions about loans, which means borrowers can apply and get money quickly. In times of emergency, when you need money right away, this option may be desirable. A low-priced loan prospect also attracts some people after viewing competing loans at high-interest rates.
How to Apply for Online Title Loans
You must be at least 18 years old to apply for an online title loan, and your annual income must be $7,500 or higher. If you are an existing customer, you need to be paid in full before applying for a new loan amount. Otherwise, you can offer the car title to your lender as collateral. However, no credit checks are required, so you can get money even if you have bad credit. An application takes five minutes. Once approved for the loan, you must drive to the lender’s location and sign the agreement on a tablet or laptop computer. You also will need to give two forms of ID and write a down payment check for $50-$250 (depending on your state) and hand over your car keys, which will be returned to you afterward (usually immediately). Most lenders allow you to take from three months to two years to pay back the loan — some will only extend it one month.
List of Documents for Online Title Loans
- Personal Identity Proof:
- Valid driver’s license,
- a current state identification card
- Two current paycheck stubs
- identical paystub from two weeks before submission.
- Recent bank statement,
- unemployment check,
- non-supplemental social security benefits payment.