Auto Title Loan

As we have discussed already, an auto title loan is basically a cash loan for car title. In other words, you are using the title of your vehicle as collateral in order for a lender to approve your loan. It’s a cash for car transaction. Such car title loans will, in most cases, be sanctioned instantly as long as you have some rock solid proof of ownership of the car.

Sometimes, auto title loans on cars may take longer to get approved, especially if the car is under two different names and you have to prove that you are the sole owner. If you had a cosigner help you get an auto loan to buy your car, then the lender would have to check with that cosigner to make sure that there is no pending debt on it.

A word to the wise here, if you are currently repaying an auto loan then you shouldn’t be expecting a car title loan on that vehicle. While you may find some car title loans online that may sanction a loan on a car that has not been paid off in full, you should proceed with caution, since it is not the norm.

Quick Tip:

“Remember, they are not always going to give you exactly what your car is worth. Keep in mind they have to make a profit, should you decide that you are not going to pay back the loan.”

Car’s Value

Think of it this way. When lenders approve a car title loan, they approve it based on the value of the car, or better put, a fraction of the car’s value, and they know that they will get any money they sanctioned through that cash loan for car title back in case you disappear by selling that vehicle.

That is why most lenders will not even consider approving an auto title loan if the car is not paid in full. The fact that you were applying for online title loans on cars in the first place, shows that you are running short on money and you need some fast cash through a quick loan. Now, if you need a loan against car title when that title is not truly yours because you are still “buying” it, then that means that if you default on your auto loan, then the any car title loan companies will come second to the dealer who actually sold you that car in the first place.

Your Car Is Collateral

In other words, the dealer would get his car back, and any lenders who gave you title car loans will have nothing to fall back on. Such car title loans have been around for a while, and their terms and conditions have been tested over and over again.

The way auto title loans work is that if you don’t make your payments in time, then the lender gets to repossess your car and sell it. So, say you had gotten a $5,000 car title loan on a car that’s valued at $7,000 (which is the norm). If you miss out on any payments, then the lender will repossess your car and sell it for as much as he can in order to cover the primary amount sanctioned through that auto title loan and make some profit. Obviously, if he is not able to repossess that car since it will belong to the dealer, then you will not be approved for an auto title loan.