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Times are tough for many Albertans. You may be in between jobs or struggling with the rising cost of living. Whatever the case may be, there are times when a loan is needed, especially if you have a big expense but not enough in the bank to cover it. Luckily, there are plenty of ways to get access to fast cash, and car title loans in Alberta are one of them. If you own a car, you may be able to use the title to secure a loan.
Let’s take a closer look at car title loans in Alberta, how they work, and what you need to qualify.
Car Title Loans In Alberta
A car title loan is a short-term loan that is secured by the title or ownership. You can use this type of loan to get fast cash without having to go through the cumbersome and time-consuming loan application and approval process of a traditional loan. You may also qualify with bad credit since some lenders don’t require a credit check for a car title loan.
It’s important to differentiate between car title loans and car loans. Whereas a car loan is a type of financing used to purchase a vehicle you don’t own. A car title loan is used to borrow against a vehicle that you already own.
Car title loans typically have the following features, though each may vary slightly from one lender to another:
Ownership
You must own your vehicle outright with no outstanding loan balance remaining. If you took out a car loan to pay for your car. It must be fully paid off before you can qualify for an auto title loan.
Loan-to-Value-Ratio (LTV)
Most lenders allow you to borrow up to 50% of your car’s value.
Interest Rate
Interest rates on auto car title loans can be quite high, depending on your car and the lender. Generally speaking, auto title loan interest rates range from 30% to 60%, which is a lot higher than other secured loan types.
However, do note that lenders cannot legally charge you more than 60% interest annually. This includes all interest and fee costs.
Fees
Like most other loan types, auto title loans come with various fees in addition to the interest rate. These fees can add up to a few hundred and may include the following charges:
- Loan application fees
- Title search fees
- Origination fees
- Loan processing fees
- Late payment penalty fees
Term Length
Car title loan term lengths generally range from 3 to 36 months, though this will vary by lender.
Funding Time
With car title loans, funding doesn’t take long to come through. Most lenders can process your loan application and get the money to you within 24 hours. Although it could take a couple of days in some cases if the lender requires additional information to approve your application.
Where Can I Get Car Title Loans In Alberta?
You can find an auto title lender near you by simply searching auto title lender in your search browser or by using a loan comparison website like Loans Canada. Here are a few auto title lenders servicing in the following areas:
Edmonton Car Title Loans
- Edmonton Auto Loans
- Title Loans Online
- Mr. GOOD Loans
Car Title Loans Calgary
- Finance West
- Calgary Title Loans
- Snap Car Cash
Car Title Loans Red Deer
- Cash Today
- Pit Stop Loans
- Get Loan Approved
How Do I Get Car Title Loans In Alberta?
Getting approved for a car title loan is relatively easy compared to other loan types, but there are still some eligibility requirements you’ll need to meet and documents to submit to the lender:
Eligibility Requirements For Car Title Loans In Alberta
- Be at least 18 years old
- Have a valid driver’s license
- Earn a minimum income (for some lenders, not all)
- Own your vehicle outright with no outstanding loan balance
- Have full insurance coverage on your vehicle
- Have all vehicle ownership and registration papers
Your vehicle must also meet certain criteria:
- Be no more than eight years old
- Be in good condition
Some lenders may have specific vehicle condition requirements. For instance, some may not permit vehicles that have been rebuilt or significantly repaired. Others may have restrictions on mileage.
Income and Credit Requirements
Some lenders may require that you meet a minimum income threshold before approving your car title loan application. Others may allow non-traditional sources of income, such as Employment Insurance (EI), pension benefits, and other government benefits.
Credit checks are also not always conducted, since car title loans are secured by the vehicle. As such, bad credit is often accepted. Check with your lender about their specific income and credit score requirements, if there are any.
Documents Required
To verify the information you provide on your loan application, you may be required to provide your lender with the following documents:
- Photo ID
- Paperwork detailing the vehicle’s make, model, year, and mileage
- Car title document to prove that you’re the legal owner
- Proof of insurance
- Bank statements or pay stubs
- Vehicle inspection report
How Much Can You Borrow Through Car Title Loans In Alberta?
For the most part, you can borrow up to 50% of your car’s value. For instance, if your vehicle is currently valued at $15,000, that means you can borrow no more than $7,500 with a car title loan.
Your car’s value is based on a few key factors, including its age, condition, and mileage. The higher the value of your car, the more you can borrow against it.
How Can I Find My Car’s Value In Alberta?
The value of your car directly influences how much you can borrow with a car title loan, which is why you need to know what your car is worth before applying. Several online resources are available to help you determine your vehicle’s current value based on its model, make, year, condition, and mileage:
- Kelley Blue Book. This popular online guide lists prices for new and used vehicles to help car buyers and owners determine the market and trade-in value of their vehicles.
- Carfax Canada. This Canadian source provides comprehensive information and history on vehicles of all makes and models for the purposes of appraisal and valuation.
- Purr. This site provides free assessments on vehicles to help you determine the full market value and trade-in value of your car.
How Fast Can You Get A Loan Through An Auto Title Lender?
Car title loans offer faster funding than traditional loan types, especially if you apply online. If all goes well with your online application, you can expect the funds from a car title loan within a few hours after approval.
What Happens If I Can’t Pay Back My Car Title Loan In Alberta?
There will be consequences if you’re unable to pay back your car title loan, including the following:
Late Payment Penalty Fees
If there’s not enough money in your bank account when the payment is due, your financial institution may charge you a non-sufficient funds (NSF) fee, which can be as high as $48 per NSF charge. Your lender may also charge you a fee if your account lacks sufficient funds. There may also be late payment penalty fees to pay, including interest on outstanding payments.
Vehicle Repossession
If your loan account is past due by at least 60 to 90 days, on average, your lender may start the process of repossessing your car. You’ll not only lose your car but your credit may be negatively affected as well.
Payment history is the most important factor in the calculation of your credit score. If you miss your car title loan payments, your credit score will take a hit. Moreover, you’ll receive an R8 rating on your credit report, which is the lowest rating before bankruptcy. This may negatively impact your credit scores.
How To Protect Yourself From Car Title Lenders: Rules And Regulations In Alberta
The rules that businesses must follow in terms of how they treat their customers vary by province. To find out what your rights and responsibilities are in Alberta, as well as what rules lenders are to follow, get in touch with the provincial Consumers Affairs office:
| Service Alberta Consumer Services Commerce Place 10155 102nd Street 3rd Flr Edmonton, AB T5J 4L4 | |
| Telephone | 780‑427‑4088 or 1‑877‑427‑4088 |
| service.alberta@gov.ab.ca |
High-credit lenders in Alberta have additional regulations to comply with. More specifically, lenders that provide high-cost credit products — including car title loans — with an interest rate of at least 32% must hold a high-cost credit business license in Alberta. This applies to lenders that work online or in person.
Car Title Loans Are Expensive: Consider The Following Resources In Alberta Before Applying For One
As mentioned, car title loans can come with interest rates as high as 60% of the loan amount, making these loan types very expensive compared to conventional loans. The addition of interest on top of the original loan amount can make car title loans difficult to repay in full by their due date, especially if your finances are weak.
Before you apply for a car title loan, consider financial assistance options that may be available to Albertans, including the following:
Emergency Financial Assistance
The Government of Alberta’s Ministry of Seniors, Community, and Social Services offers emergency financial assistance to residents of Alberta in the event of a significant health or safety risk that is beyond a person’s control. Financial assistance is provided to those who are unable to cover basic needs, including food, housing, clothing, medication, and transportation.
Rent Assistance
The Meridian Housing Foundation is a registered charity established under the Alberta Housing Act that provides a long-term rent assistance benefit designed to subsidize low-income Albertans who rent in the communities of Stony Plain, Spruce Grove, and Parkland County.
Eligible recipients of the benefit must be in core housing need with total assets of $25,000 or less. The subsidy amount ranges from $50 to $500 per month and is based on household size, income, composition, and the current average rent.
Poverty Reduction
Residents of Strathcona County in Alberta may be eligible for limited assistance from the County Clothes-Line Foundation poverty reduction initiative. Grants and emergency support are funded by profits earned from recycled donations and thrift purchases by members of the local community. A referral from the Family and Community Services of Strathcona County (FCS) is needed to qualify for the program.
Baby’s Essentials
Brighter Futures Family Resource Society provides families with various resources to ensure a healthy and happy future for children in the Drayton Valley community of Alberta. Families in immediate emergencies or extended difficulties with infants can qualify to receive diapers and formula. Eligible families will receive coupons to buy these items once a month.
Food Banks
The Family and Community Support Services of Barrhead and District operates a food bank that services residents of Barrhead and the Fort Assiniboine area. Residents can visit the food bank by appointment to obtain food products.
Final Thoughts
If you own a car, you may be able to use it to access a few hundred or a thousand dollars through a car title loan. The cash can come in handy given the soaring cost of living in Alberta these days. As long as the vehicle is not currently being financed, your car can be a resource for extra money needed to cover a big expense.
