Recently, to help pay for a much-needed expense in the household, I opted to get a car title loan at a place recommended by the local bank that was unable to give me a loan on my car because it was “too old” (most banks will only do title loans on vehicles 2005 or newer, if at all). So I went down to the recommended car title loan establishment and informed them that I needed $2000, and with clean and clear title in hand on my 2003 Chevy Malibu (126,000 miles) I was able to get a loan, but not without a few requirements beyond just having a car itself.
First of all, if you want a car title loan, you better have a newer vehicle. The first thing the car title loan place will do is look up the Blue Book value of your car (mine was $4700), and if what you’re asking for is more than half of what the car is worth, you either need a second car title for the additional collateral, you better hope you have high credit, or you may need to get a co-signer. I had to do the car title loan on my car because my fiance’s 1999 Honda with over 200,000 miles didn’t cut it for the amount of money we wanted. My car was newer and in better condition, and BARELY made the cut.
You will have to provide at least 3 references, and the place I went to asked that they be local, and mainly relatives. I had to explain to my mom why a car title loan place was calling her, and it was a bit embarrassing. Also, most car title loan places will want to verify that you have full coverage on your car while they have your car title, so you’ll have to call your car insurance rep and tell them who your new leinholders are so they can send copies monthly to the car title loan place to verify your full coverage. If you don’t have full coverage on your car, you may not get the loan at all.
Your interest rate may be astronomical. My loan was for $2000, and over 2 years if I just pay the minimum balance, I will be paying back $3,332.16. Yikes! The plus side is if I come up with the remaining balance at any time and pay off the loan in full (crosses fingers), I don’t have to pay the whole balance with interest, just what is left of the initial loan. Oh, and don’t forget- part of the balance will be paying for the “in case you die” insurance, which I paid $200 for, tacked onto my bill. Sheesh. If we didn’t need the cash right away, I would have walked. But we had no other option, and the consequences for NOT having the cash we needed far outweighed any inconvenience of getting such a high interest loan. I don’t even want to think about the interest rate.
Oh- and you don’t get cash, you get a check- right away, actually, as soon as you pass the employment check, the credit check, the guy goes out and checks out your vehicle, you fill out about a novel of paperwork, and you go through the lecture that if you are more than 7 days late on a payment they take your car for good. But at least you get the money. Just make sure to cash it at the bank displayed on the check so you get your much-needed money right away.
If you can avoid it, try to forgo a car title loan place. If you can’t, expect a few hurdles to get your moolah, and expect to pay an arm and a leg over time. And expect to get turned away. Car title loans want your business, but they want better collateral more, so they won’t take your junky car whether you have the car title or not. Pay attention to all the fees, interest, and payment arrangements, and know whether or not you will have to pay all that interest if you pay the loan off in full in a few months. Stay informed, and you won’t be surprised. Just don’t expect an auto title loan to be easy.