Auto loans are a form of quick cash, a personal loan that does not always require credit checks or proof of income. If you have a clear title for your car – which means that the car is ultimately yours – you can use it as collateral in the loan application process. Can I get a car title loan without the title?
What is the explicit title?
A clear title is one that is free of liens (usually due to unpaid debts). That’s how it works; if you borrow money to buy a car, the lender has in this interest. In this case, the title is not clear because the car owner still owes the lender and does not have full rights to the vehicle. It is possible to take out a car loan without a clear title and you can keep your vehicle throughout the entire rental period.
Let’s see again: what is a car loan?
Title loans are a type of loan without the option of checking creditworthiness, targeted mainly at people with low income and much lower than the ideal credit score. Because these types of loans do not require checking creditworthiness as part of the application process (hence the name), they can be a financial option for people who are blocked from traditional personal loans and need quick cash. Other types of cash loans without a credit check include loans for withdrawals, loans in pawnshops, and cash advances.
Unlike payday loans, which are unsecured loans, loan companies require the borrower to provide collateral under a loan agreement. Translation: Require the borrower to issue a title on his car, truck or other motor vehicle in exchange for cash – hence the name “title loan”. The title must be free from liens, which means that the car has been paid off completely.
How to get a car loan with no explicit title
Basically, you can’t get a title loan unless you have a clear title – meaning it isn’t used as collateral for another loan. However, you can get a loan for equity.
Just like home loans, car loans allow you to borrow against the value you currently have in your car. Let’s say you have only paid back 70% of the loan and you want to use it as collateral. An equity loan allows you to borrow up to 70% you have.
Although there is a difference between auto equity and auto title loans, don’t count auto title lenders right away. Some lenders use the terms interchangeably.
Consider the consequences
For many people, especially those living in rural or suburban areas, losing a car means losing transport to and from work. Losing a car would also mean losing your job.
It doesn’t matter if you have a car title or not. No matter how unforeseen expenditure has sweated you, a title loan is probably not a good answer for your financial needs.