Bad credit? Use your car title to get an auto loan | finder.com

If you’re in need of a loan but unsure of your options because of your credit score, low income, or any other reason, you may want to consider an auto title loan. These loans are attached to the title of your car and let you access credit that is repaid in the short-term.

Find out how these loans work in the guide below where we’ll address fees, features, and eligibility criteria, and how you can apply.

Auto title loans you could apply for with bad credit

Here are some loan providers that you can apply to. Note that the max loan amount is based on the lender’s max amount. The amount will vary based on your state of residence.

Rates last updated May 18th, 2017

  • If the provider quotes a different rate to the one above please let us know

These lender matching services are not lenders, loan brokers or agents for any lender or loan broker. They also do not make credit decisions. They focus on trying to match you with a lender that might be able to provide you the funds you seek. Note that the max loan amount is based on the matching services max amount, but it will vary based on your state of residence. If you proceed with one of these services, confirm that the lender is reputable by checking with your local government.

Rates last updated May 18th, 2017

  • If the provider quotes a different rate to the one above please let us know

How do auto title loans work?

Auto title loans, also referred to as pink slip loans, title pledges, or title pawns, are loans that are secured to the title of your vehicle and designed to be repaid in the short term. Keep in mind that if you don’t keep up payments on this convenient line of credit your vehicle can be repossessed and sold. Lenders that provide these loans usually require that you have a lien-free title, which means there are no pending loans attached to the vehicle’s title.

After you apply you may have to take your vehicle to a physical location to get it appraised. You will usually be offered an amount that is 25-50% the value of the car. Auto title loans allow you to keep full access to your vehicle and the lender only holds the title of the vehicle as security.

Once you get the approved funds you have to start making payments as per a predetermined payment plan, which is typically in installments.
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Some benefits that come with a car title loan

When you’re comparing auto title loans consider these aspects:

  • Interest rate and fees. The interest rate can have a big impact on the overall cost of the loan. Even a small difference in percentage can result in your paying hundreds of dollars more. Be on the lookout for fees, which can also drive up the cost of your loan.
  • Loan amount. The amount you can borrow depends on how much your car is appraised for by the lender and the maximum loan amount set by the lender. Generally, you can borrow 25-50% of the value of your vehicle, which usually amounts to a loan of between $100 to up to $10,000.
  • Loan term. The loan terms differ between providers and states, but are generally quite short.
  • Payment flexibility. Find out if a lender lets you make payments that match your pay schedule. This might be weekly, bi-monthly, or monthly.
  • Making extra payments. Some lenders charge penalties or fees if you decide to make additional payments, or if you decide to repay the loan ahead of time. If you can repay a loan before schedule without incurring any additional costs you can save in interest.

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Have you weighed the benefits and drawbacks?

  • The risk factor. If you don’t make timely payments, or if you cannot repay the loan, the lender has the right to take possession of your vehicle.
  • High cost. While these come with a lower cost compared to payday loans, they are still costly when compared to standard loans. Consider if you can afford the repayments.

Servicemembers and their dependents are protected under special provisions of federal law and a Department of Defense rule. These provisions relate to payday loans, tax refund anticipation loans, and vehicle title loans. According to these provisions the military APR for car title loans cannot exceed 36%. This applies to all title loans with terms of less than 181 days, and most fees and charges are included in the rate.

Things to avoid

  • Add-ons. Lenders may offer add-ons with the loan, such as roadside service plans, that can increase the cost of your loan. These add-ons may be a requirement of the auto title loan, so it’s important to find out the value of the add-on in relation to its cost before agreeing to it.
  • Taking on a loan you can’t afford. If you think you may have trouble paying off the loan in a timely manner you may want to avoid taking it. If you don’t keep up your payments you stand to lose your vehicle and lose creditworthiness.
  • Rolling over the loan. If you can’t pay off your loan in the original term set out in your contract — for example, 30 days — the lender may allow you rollover your loan. If you elect to rollover your loan you will be charged additional fees and interest. If you do need to rollover your loan make sure the amount is affordable otherwise you could get stuck in a cycle of borrowing and debt.
  • Not reading the terms and conditions. Make sure you go through the terms and conditions of your loan carefully. This should give you a clear indication of how much the loan might end up costing.

How to apply

Applications can be submitted online or in person. If you’re looking to get your cash on the same day your best bet is to go to an auto title lender in person. In person or online you will need to meet some qualifications:

  • Be a US citizen or permanent resident
  • Live in a state that allows auto title loans
  • Meet the age requirements of the state you’re living in (usually 18-21)
  • Have steady income
  • Own your car outright

If all of the requirements are met there are just a few steps to apply:

  • Go online or in person to a lender
  • Provide your name, date of birth, address, and email address
  • Show state-issued ID or enter the information if applying online
  • Give details about your employment status and income
  • Have your vehicle evaluated

If you apply online you will have your vehicle evaluated in person at one of the lender’s physical locations. Usually this happens the next business day.

Questions we’ve been asked about auto title loans

These criteria differ between lenders, but generally you should be an American citizen or a permanent resident of the US, meet your state’s minimum age requirement (usually 18-21), and demonstrate and ability to repay the loan.

You’ll need to submit a clear title that shows you are the owner of the vehicle. The application will require information about your employment and income and you’ll also have to complete an identity check using your driver’s license, passport, or state-issued ID.

Yes, these essentially refer to the same loan type.

This means your car has no outstanding loans or judgements against it, and that you own your car outright.

Yes, some lenders also offer motorcycle title loans.

Yes, you will need to be the legal owner of the vehicle to get a car title loan.

Confirm with the lender whether you will just need permission from the other person listed on the title or whether you will need to get a joint car title loan.

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Category: Title

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