What you need to know about car title loans

Car title loans have become an extremely popular option for consumers who need emergency cash for household bills, vacations, shopping, and other expenses. These advances are very popular because just about any consumer can qualify. The applicant does not have to have a perfect credit score or income from a typical employer. People who collect disability benefits, government assistance, or self-employment funds can gain approval for title loans just as easily as a person who works a regular job. Title lenders also provide an option for consumers who have less than perfect credit scores. Late payments, missed payments, repossessions, and foreclosures are acceptable.

What is a Car Title Advance?

Car title loans are short-term loans that go against the value of a person’s car. In other words, the lender will extend an advance according to the value of the vehicle. The lender will take into consideration the age, condition, make, model, and mileage of the vehicle. It will conduct a thorough inspection of the car and then offer the applicant a cash advance for a fair value. The prospective borrower can accept the terms of the agreement, negotiate the pricing, or decline the entire transaction. No one is obligated to take this type of advance.

Qualifications for a Title Advance

To qualify for a title loan, the applicant must be at least 18 years of age or older. The law restricts minors from signing contracts. Taking out a title loan requires the signature of a person who is of legal age to sign the documents. Therefore, no one who is under the age of 18 may apply.

The person who is requesting the funds must also own a vehicle. He or she must have the title in hand when visiting the lender. The lender will want to put a lien on the automobile as insurance that the person will make payment. In some cases, title lenders will grant a cash advance to a person who does not won the title. In rare instances, when an individual only has one or two payments left, the lender may pay the balance for the consumer.

The automobile must be in working condition to qualify. The lender must be able to hear it running and see that it can operate before it will approve an advance. The logic behind this is that if the borrower does not repay the advance, the lender can resell the automobile.


Car title loans generally have a life span of 30 days. The borrower is expected to repay the full loan amount plus any additional finance charges and miscellaneous fees. If the borrower has a problem making the payment, he or she may ask for an extension. However, extending the loan can become very costly. Clients who conduct multiple extensions can end up spending thousands of dollars just for another month of time.

Title loans are excellent for short-term ventures. The borrower should feel confident that he or she could make the payment before applying for such a product.