Your car is cash when you need it, especially if you have bad credit right now. Car title loans unlock the built-up equity in your car for situations when you don’t have any other means of credit and you need to pay expenses.
Getting a personal loan with a regular bank is hard these days because of high interest rates and a Canadian cash crunch for consumers. Being a newcomer to Canada with no credit history or having bad credit does not help either. Car title loans are short-term loans that let you use your car equity as collateral for the loan.
Car Title Loans Have These 5 Eligibility Requirements
Since your car is collateral for the loan, approval is usually easier than for an unsecured loan. These are the requirements to get the loan.
Have full insurance protection for your car.
Your vehicle must be no more than 8 years old.
You have to own the car completely. There cannot be any outstanding debt attached to your vehicle.
You must be 18 or older and be in possession of a valid driver’s license.
You must have all the appropriate registration papers for your vehicle.
3 Steps To Apply To A Car Title Loan
How To Get A Car Title Loan
Gather Your Documents
Before applying, gather all the documents necessary to apply for an auto title loan. Many applicants get rejected or have their application process delayed due to incomplete or missing documents. In general, you’ll need proof of identification, proof of income, proof of employment, and proof of car title.
Find A Lender
Auto title loans can only be found with alternative lenders, banks and credit unions do not offer auto title loans. To help you find an auto title lender with the best offers, you can use a loan comparison website like Loans Canada to get multiple quotes from different lenders using a single application.
Complete The Application
After you review your offers, you can complete the application process with the lender of your choosing. After that, you’ll simply need to wait for approval, after which you should receive your within a few hours to a couple of days.
Available in seven provinces, iCash is an online source of fast, small loans that can be used for any emergency. Approved applications are processed within the same day and no documentation is required before the transfer of your funds. You can borrow up to $1,500 with iCash. Every time you pay the loan back following the agreed-upon deadline, you become a more reputable borrower. The increased trust allows you to borrow more each time. iCash uses a Trust Rating System, an algorithmic function that determines your merit as a borrower.
If you’re looking for an open-ended line of credit with credit limits up to $15,000, Fora is the best choice. Fora’s line of credit lets you withdraw funds from your available credit, and repay and redraw as needed. This makes it an excellent option for those seeking flexibility and quick access to cash as needed.Moreover, interest rates start as low as 19.9% and are only charged on the amount you withdraw.
Spring Financial is an online consumer lending company that offers innovative financial and credit-building solutions designed to give Canadians the opportunity to build credit, save money and borrow responsibly.With many Canadians struggling with high-interest debt and limited financing options, Spring Financial strives to provide Canadians with affordable and accessible financial products that can help them achieve greater financial freedom. Among their growing suite of smart money solutions, Spring Financial offers $1,500 cash advances, personal loans up to $35,000, and a credit-building program that helps you build credit and save money.
Fairstone is a great choice for consumers looking for loans with affordable payments that meet their needs and budget. As Canada’s leading non-bank lender of personal loans, consumers can get unsecured loans up to $25,000. Homeowners can choose a secured loan (backed by the value of their house) to borrow more money and access lower payments compared to an unsecured loan. Whether you’re looking to consolidate debt into one simple monthly payment, cover unexpected expenses or something else altogether, Fairstone is a great option.
If you’re short on cash, Bree offers cash advances of up to $350 with zero interest. Bree is an online financial platform that provides interest-free cash advances to help consumers avoid overdrafts and NSF fees. Their mission is to be a dependable and accessible financial source that consumers can trust when they need financial support. Moreover, you can access the money you need with Bree without having to worry about credit checks, interest charges or late fees.
The MogoMini line of credit offers Canadian consumers a great personal loan alternative. Borrowers can access up to $5,000, spend what they need when they need it, make the automatic minimum payments, and finally control their own principal payments. This Mogo product is flexible and users can test drive their line of credit for 100 days to see if it’s the right fit. Access their easy online application via your MogoMoney dashboard and get pre-approved in 3 minutes with no impact on your credit.
LoanMeNow offers Canadian consumers quick access to the cash they need. They offer loans up to $1,000 with no credit check required. Funds are deposited directly into your bank account within as little as 24 hours. A short-term loan from LoansMeNow can help you cover the cost of an unexpected expense or tide you over until your next paycheque. Whatever your financial needs are, LoanMeNow’s quick approval time means you’ll be able to get back on track as soon as possible.
SkyCap Financial has been helping Canadian consumers take control of their financial futures since 2013. Their main goal is to provide alternative financing to all Canadians, regardless of their financial past or credit history. They provide fast and easy short-term loans ranging from $500 to $10,000 and approve applicants in as little as 24 hours. Consumers can take advantage of SkyCap Financial’s quick application and a team of experienced individuals who strive to make your experience as smooth as possible. SkyCap Financial bases all their lending decisions on three main factors, current income, credibility, and stability, so they can approve more Canadians, especially those who have been rejected in the past based on credit issues.
Nyble helps users quickly access a line of credit of up to $250 without credit score requirements. This is a good option for anyone who wants to avoid overdrafts or needs a small amount of cash quickly. Approval is instant and funding takes up to 3 days. But if you upgrade to a paid membership for $11.99 a month, you can receive your money within 30 minutes. Nyble reports your payment history to the credit bureau monthly and approves you for large amounts as you build trust with the platform. You can also track your credit score, earn reward points for improving your score, and access other features such as credit monitoring and digital identity theft protection.
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What Documents Do You Need For Car Title Loans?
Car equity loans are pretty straightforward and you can apply online. You simply fill out a short loan application. Although there will be some differences depending on which lender you chose to work with, most will require:
Personal Identification – This includes documents to verify your name, address, and phone number. Lenders usually accept a driver’s license, passports or some other government-issued photo ID.
Financial Details – Some car title lenders may require proof of income and employment. This can include bank statements or pay stubs.
Vehicle Title Documents – One of the most important documents you will need to bring is your car title document. This is necessary to prove that you are the legal owner of the car.
Car Insurance – Lenders require that you have insurance on your car, so you may need to purchase it and provide proof.
Vehicle Details – You’ll need to provide information regarding your car’s make, model, year of the car and mileage.
Vehicle Inspection – Your lender may also require a car appraisal to verify its condition and value.
If you think that you need to know more about car loans and auto financing, we can help. Just click the button below to get the information you need.
Typically lenders will lend up to 50% of your car’s value. However, the loan amount can be as little as $100 in some places and run as high as 75% of the Kelley Blue Book (KBB) resale value of the vehicle.
Once you come to an agreement, the lender puts a lien on vehicle. The lien lifts when you pay the loan completely. Again, there cannot be any existing liens on the car when you apply for a car title loan.
What Is A Lien?
The lien is what makes a secured car loan, secured. It is a type of security interest that is placed on the car. It’s meant to help ensure that the borrower will, in fact, make their loan payments on time.
If the borrower stops making payments on their loan or cannot afford to pay the loan off in full, the lender can legally repossess the car and sell it to recoup the cost of the loan.
Do I Still Own My Car If I Take Out A Car Title Loan?
You still own your car and you can use your car like you already do. The lien is in place to give the lender the right to legally take possession of the car when you still owe the lender money but stop paying the debt for any reason.
How Long Until You Get The Money From Car Title Loans?
The good news is that you get the money fast – usually within hours or even a few days of approval. Of course, it depends how you apply. Online lenders are better able to evaluate and approve your loan.
What Are The Benefits Of Car Title Loans?
There are several benefits using cash value you already have but need to access – that is what equity is. Of course, nothing is perfect. These are the main pros and cons of a car title loan.
Pros
Cons
Speed – apply online and get approved within hours or days
The car secures the loan – if you stop making payments, the lender can seize it.
What Is The Difference Between A Car Title Loan and A Car Equity Loan?
There is no difference between car title loans and car equity loans.They are secured loans. The debt-free cash value in the car is collateral. Since you paid off your car and own it entirely, you have a lot of equity in it.
Just like a home equity loan, a car title loan is a car equity loan. You use the value of your car against the loan. However, if you default on any payments, your lender has the right to seize your car to recoup the money.
Can I Get A Car Equity Loan If I Have Bad Credit?
If you have bad credit, an auto title loan is probably the easiest way to get a loan. Since you secure the loan with your vehicle, your application is less risky to the lending officer who is reviewing your file.
Tips On What To Watch Out For With Car Title Loans
While car title loans have numerous disadvantages, they can be overcome by doing the following:
Read the Contract: Make sure you read the contract thoroughly and understand the consequences.
Make Sure You Understand The Cost Of All Fees: Many car title loan lenders also charge numerous fees that can quickly add to the cost of the loan. Some common ones include administrative fees, loan origination fees, vehicle inspection fees and more.
Choose A Shorter Term – Try to pay the loan off in the shortest amount of time, and avoid using this quick and easy financing option as a short-term solution to long-term financial problems.
Do Your Due Diligence – If you are in a cash emergency and you intend to use this type of financing, a car title loan can be a good source of funding. Just make sure to shop around, read the fine print, and pay it back within the allotted time and you should be okay.
Where Can I Find Car Title Loans Near Me?
Car title loans are found both online and at physical locations near you. However, it is easier to find auto title lenders online in your area than in a physical location.
BHM
Loan Amount
$1,000 – $15,000
Terms
12 – 60 months
Funding Time
Less than 24 hours
Eligibility
– Car must be less than 8 years old – Car must be paid off – Car must be insured – Clear title
Documents Required
– 2 valid photo IDs – Proof of income – Proof of address – Photos of vehicle and vehicle’s odometer – Proof of insurance – Proof of ownership of the vehicle – Void cheque – 5 References
Car Title Loans Are Fast Access To A Short-Term Loan
Car title loans are short-term easy to pay off loans and therefore are a great option when your income is tight but life is still happening. The convenience of accessing your car’s equity allows you to deal with whatever emergency or financial needs you might have right away.
If you’re interested in more information or want to start the process, Loans Canada can help.
Are Car Title Loans Different From Personal Loans?
Yes, they are different things. Car title loans (aka: auto title loans, car equity loans) are a form of credit Canadians can use to get a lump sum of cash. You use your car’s equity to secure the loan. You repay it in installments just like a personal loan. Of course, you repay what you borrowed plus interest. Personal loans are either secured or unsecured and require a hard credit check. A personal loan amount can be much higher than the value of 50% of the value of any car.
Can I get a loan against my car title if I’m still paying off my car loan?
Unfortunately, if you don’t own your vehicle outright you likely won’t be able to get approved for an auto title loan. The main reason for this is that the lender who holds your car loan will be first in line to recover their money if you default on your loan. The lender who holds your title loan will be second and may never get their money back. Most lenders won’t want to take this risk.
What credit score do I need to get approved for a car equity/car title loan?
Ultimately this depends on the lender you choose. But, the good news is that title loans often come with less strict requirements (including credit score limits) because the loan is secured. This means that if your credit score isn’t quite as high as you would like, you can still get approved.
How much money can I borrow with an auto title loan?
This depends on the value of your vehicle, how old it is, and what condition it’s in. In order to get approved for a title loan, you need to own a vehicle that has some value. If your vehicle meets these requirements, you can typically gain access to anywhere between 25% to 50% of its value. It can go as high as 75% of the built-up equity. Remember the value of your vehicle is not what you originally paid for it.
Will getting an auto title loan help to improve my credit?
If your vehicle title loan provider reports payments to one or both Canadian credit bureaus, then it can help you work towards improving your credit. But, if they do not report payments, then the loan will have no effect on your credit. If credit improvement is important to you, always make sure you ask your lender if they report payments before signing a contract.
What is the difference between a car loan and an car title loan?
A car loan is used to purchase a new or used vehicle, in this case, the vehicle acts as collateral for the loan. Once you’ve completely paid off your car loan, you can then use your vehicle to secure a title loan. The money from a title loan can be used to purchase whatever you need.
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