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It’s becoming increasingly difficult to pay the bills in Ontario these days. Housing, food, and gas prices are soaring, leaving less money on the table for many Ontarians.
If you’re facing a tough financial situation, you may benefit from a loan. But rather than wait days or longer to get the funds from a traditional loan, a car title loan can get you the money you urgently need in a fraction of the time. If you own a car, you can use it to qualify for a car title loan.
Let’s get into more detail about car title loans in Ontario, how they work, and how to qualify.
An Overview Of Car Title Loans In Ontario
The following chart outlines the details of car title loans for easy reference:
| Loan Amount | Up to 50% of car’s value |
| Interest Rate | Higher interest rates compared to other secured loans |
| Fees | – Administrative fees – Loan origination fees – Vehicle inspection fees |
| Term Length | 12 – 60 months |
| Funding Time | Less than 24 hours (if applied and approved within the same business day) |
Where Can You Get Car Title Loans In Ontario?
Many lenders in Ontario offer car title loans. Here are just a few to consider:
- Car Title Loans Mississauga – If you live in Mississauga, you can find local car title lenders such as Fast Action Finance, Get Loan Approved, and Snap Car Cash.
- Car Title Loans Brampton – If you live in Brampton, you can find local car title lenders such as Canadian Title Store, Money Mega Mart and Canada Car Cash.
- Car Title Loans Toronto – If you live in Toronto, you can find local car title lenders such as Borrow With Your Car, Car Title Loans Canada and Apex Loans Canada.
How Do You Get Car Title Loans In Ontario?
Getting approved for a car title loan in Ontario is relatively easy compared to other loan types. But there are still some eligibility criteria you need to meet and documents to supply.
Eligibility Requirements For Car Title Loans In Ontario
- Credit score. Car title loans typically allow for lower credit scores because the loan is backed by an asset of value (ie. your car). Most lenders will accept credit scores that are less than perfect, though the exact requirements vary from lender to lender.
- Minimum income. You may need to provide proof of income when applying for a car title loan. This is to show the lender that you’re financially capable of making your loan payments. The minimum income requirements will depend on your lender, the loan amount, and the value of your car.
- Employment requirements. Some lenders require proof of traditional employment, while others may accept sources of funds from non-traditional income, such as Employment Insurance (EI) benefits, disability benefits, pensions, and so forth.
- Car insurance. Your vehicle must be fully protected with a valid auto insurance policy.
- Vehicle condition. Some lenders may have very specific requirements when it comes to the condition of the vehicle. For instance, they may insist that the car is not rebuilt or repaired following an accident. There may also be age and mileage requirements, which affect the car’s value.
- Minimum equity. You must own your vehicle, which means there must be no outstanding loan balance remaining on a previous car loan.
Documents Required For Car Title Loans In Ontario
- Car insurance documents. You will need to show proof of insurance with documents from your insurance provider.
- Personal ID. To verify your identity, you will need to provide your lender with a photo ID, such as a driver’s license, health card, or passport.
- Bank statements. Your lender may want to verify your bank account to ensure it’s still active and in good standing and capable of accepting withdrawals for loan payments.
- Car title. You will need to show documentation proving that you are the rightful owner of your vehicle.
How Much Can You Borrow Through A Car Title Loan In Ontario?
Generally speaking, lenders will allow you to borrow no more than 50% of your car’s current value. That said, the amount you can borrow will vary greatly based on your car’s value.
For instance, if your vehicle is valued at $1,000, the most you can borrow is $500. But if your car is worth $10,000, you can borrow as much as $5,000. So, the higher your car value, the more you can borrow on a car title loan.
How Can I Find My Car’s Value In Ontario?
The most you can borrow on a car title loan depends on your car’s value, as mentioned. That’s why it’s important that you know how much your vehicle is worth before you apply.
To make this easier for you, there are many online resources available that can help you determine your car’s value based on its make and model, age, condition, and mileage:
- Kelley Blue Book. This is one of the more popular guides online that lists prices for new and used vehicles. You can use these figures to help you determine the market value of your vehicle, which will help you get a better idea of how much you may be able to borrow by using your vehicle for a car title loan.
- Carfax Canada. This online Canadian resource provides detailed information on all vehicle makes and models.
- Purr. This website resource provides free vehicle assessments to help you find out what your car is worth in today’s market.
How Fast Can You Get A Loan Through An Auto Title Lender?
If you apply online for a car title loan, you can get your funds in as little as a few hours after loan approval. Funding times for these loan types are typically much faster than traditional loan products, especially when you apply with an online alternative lender.
What Happens If I Can’t Pay Back My Car Title Loan?
If you fail to keep up with your car title loan payments, you could face the following consequences:
Late Payment Penalty Fees
If you miss a loan payment, your lender may charge you a late payment penalty fee, including interest on the overdue payment. If your lender tries to withdraw your loan payment from your account and you don’t have enough money to cover it, you will be charged a non-sufficient funds (NSF) fee.
Vehicle Repossession
Lenders usually wait for at least 60 to 90 days to pass after a missed payment to start the process of vehicle repossession. Not only does this mean that you’ll lose possession of your car, but your credit score may also be affected.
How To Protect Yourself From Car Title Lenders: Rules And Regulations In Ontario
Ontario businesses have rules to abide by when it comes to how they treat consumers. Failure to comply with these rules can result in serious consequences. That said, the rules surrounding businesses and how they treat consumers vary from one province to the next.
To discover your rights as a consumer in Ontario and the rules that lenders in the province must follow, contact the Ontario Consumers Affairs office:
| Consumer Protection Ontario – Ministry of Public and Business Service Delivery 77 Wellesley St W PO Box 450 Toronto, ON M7A 2J6 | |
| Telephone | 416‑326‑8800 or 1‑800‑889‑9768 |
| consumer@ontario.ca |
There are additional regulations that high-credit lenders in some provinces must follow.
The Ontario Government is proposing to set the threshold for high-cost credit products at an annual percentage rate (APR) that is at least 25% higher than the Bank of Canada Rate.
Car title loans are typically classified as high-cost credit products because of their high interest rates. It remains to be seen when or if these proposed recommendations become a reality in Ontario. If they do, lenders that offer such high-rate products will be required to hold a specific business license in Ontario, whether they work in person or online.
| Max Interest Rate | Currently, there are no provincial interest rates or fee limits on high-cost credit lenders (other than payday lenders) in Ontario. However, lenders must follow the federal Criminal Code interest rate limit of 60% (APY), which is equivalent to 47% (APR). |
| Fee Caps | While there are no provincial caps on fee charges, there are federal rules. The total fees, cost and interest of a high-cost personal loan cannot be more than the criminal interest rate of 47% APR. |
| Licensing Requirements | Alternative lenders (other than payday lenders) are not required to be licensed in Ontario. |
| Debt Collection Rules | While there are consumer protection rules on how collection agencies can contact borrowers, none such exist for high-cost credit lenders (other than payday lenders). |
Auto Title Loans Are Expensive In Ontario: Consider The Following Resources Before Applying For One
Whether you need an auto title loan to cover the cost of rent, school supplies, or a medical device, it can be expensive to finance due to the high interest rates. Instead, first, look into the various financial support programs offered in Ontario.
You can use these programs to help cover your daily living costs. With less of your income going toward rent and food, you’ll have more for your other needs.
Emergency Financial Assistance
Ontario residents in financial need may be able to get financial assistance from Ontario Works. Income support payments are made monthly to help you cover your bills.
If you’re in an emergency and don’t have enough money to pay for basic necessities like food or housing, you may qualify for short-term emergency assistance support. However, you cannot collect these benefits if you’re already collecting money through Ontario Works.
Rent Assistance
The Canada Ontario Housing Benefit (COHB) program offers eligible residents of Ontario a housing benefit to help with the cost of rent in the private housing sector. The COHB covers the difference between 30% of your household’s income and the average rent price in your area.
Disability Support
If you are unable to work due to a disability, you may be eligible for financial assistance through the Ontario Disability Support Program. If you qualify, you will receive a monthly disability benefit payment. The exact amount you receive will depend on your living situation.
Food Banks
There are dozens of food banks all over Ontario that provide food products and vouchers for groceries to low-income Ontarians. Each food bank serves only residents who live within the local community. For instance, the Daily Bread Food Bank has several locations across southern Ontario for local residents to access.
School Supplies
The cost of school supplies can be very expensive when you add up all the items that children need for the classroom. Thankfully, there are many school supply charities in Ontario. For example, Toronto Cares is a charity that runs an annual Back-To-School Drive to support local Toronto students from low-income families.
Final Thoughts
If money is tight, you may be able to use your car to get your hands on a few extra bucks. As long as your car loan is fully paid for, you can take out a car title loan and tap into your vehicle’s equity when the need for extra money arises.
