Title pawns in Alabama can be a quick way to access cash in an emergency, especially if you have bad credit. However, like all forms of borrowing, you must have a proper understanding of how they work. Making common title pawn mistakes can increase repayment costs and even result in loan rejection. At Alabama Title Loans Inc., we want to help you avoid these pitfalls.

In this guide, we will provide first-time borrower tips for Alabama title pawns, along with useful advice for past borrowers who may wish to avoid mistakes when borrowing cash. Learn how to avoid title pawn pitfalls below!

5 Common Title Pawn Mistakes To Avoid

Just because title pawns are a quick and effective way to get emergency cash for urgent expenses doesn��t mean they are without risks. There are mistakes borrowers can make during the borrowing process that can lead to rejection, higher repayment amounts, and other disadvantages. Avoid these errors by learning about the common mistakes borrowers make with title pawns.

The following are five common title pawn mistakes you should avoid:

1. Not Knowing How Title Pawns Work

Title pawns in Alabama are secured against the value of your vehicle. When you contact us about a title pawn, we’ll determine how much we can lend you based on your vehicle's make, model, age, mileage, and condition. We’ll use industry-recognized techniques to determine the value. However, we can assure you that we do offer fair valuations. Our title pawns range from $300 to $15,000.

The number one mistake people make is misunderstanding what happens to their vehicle should they go ahead with the pawn. Many people believe we’ll keep the vehicle until everything is repaid. We don’t. We hold onto the title of your car. As long as you keep up with the payments on your pawn, your vehicle is yours to use however you see fit.

A big part of understanding how title pawns work is realizing that you need to have a lien-free vehicle title to get approved.

2. Not Knowing Title Pawn Requirements

For a title pawn, you need a lien-free title. There are many reasons why you may have a lien on your vehicle’s title. The most common is if you bought your vehicle using financing and you have yet to pay it off. Technically, because you still have vehicle financing, another person has a financial stake in it. Therefore, we cannot place a lien on your title, and you cannot borrow cash.

This is just one of the requirements for a title pawn in Alabama. Before applying, you must understand all of the requirements to ensure you can get approved for a title panel without issue.

Here are the required items for a title pawn in Alabama:

• A state-issued photo ID that displays your full name and date of birth
• A lien-free vehicle title in your name
• Your vehicle for a quick inspection

If you have these items, you have a good chance of getting approved for a title pawn. You should now worry about how much you should borrow to ensure you only borrow as much as you need.

3. Borrowing More Cash Than Required

Borrowing more cash than you need is one of the top mistakes with a title pawn. As mentioned previously, you can borrow up to $15,000, but not everyone will need that much. Before you consider a title pawn, consider how much cash you need to borrow. 

For example, you may have missed a week of work due to illness and now need $220 more for rent. In that case, you should only need to borrow $220 to afford your expenses. Even if your vehicle is worth more, don’t borrow more than you need.

Here is why you should only borrow what you need:

• The more you need to borrow, the more you need to repay – Eventually, you’ll need to repay your debt. This can have a significant impact on your budget. Remember, title pawns are not paid over long periods of time. They are short-term loans, designed to be repaid quickly. Borrowing just what you need can make repayment simpler.
• Increased risk of luxury purchases – If you borrow more cash than you need, you’re far more likely to make non-essential purchases using your title pawn cash. It’s human nature to want to spend excess cash, but you must repay this money no matter what you spend it on.
• Added financial stress – You are already in a stressful financial position if you need to borrow money for an emergency. Imagine how much more you can add on by borrowing much more than you need.

This is an easy mistake to avoid. Before you request a title pawn, consider what you need cash for and the absolute maximum you need to borrow. You must also make sure you only borrow money for emergencies and not for luxury purchases.

4. Borrowing Cash For Non-Emergencies

Title pawns are not for non-essential expenses. When you borrow cash from us here at Alabama Title Loans, Inc., think of it as a last resort. A title pawn is for when you need cash immediately, i.e., you cannot wait until your next paycheck.

Using a title pawn to fund a vacation, buy a new phone, or splurge on clothes is reckless and financially irresponsible. You have to pay interest on what you borrow, so think of those luxury purchases as being more than what you paid. That’s why you should only borrow title pawns for essential purchases that can’t wait.

Emergency expenses may include:

• Essential vehicle repairs – Chances are, you rely heavily on your vehicle. If it is out of action for even a day, your life may be adversely impacted. Many people considering a title pawn are dealing with vehicle issues. Vehicle problems can be costly to resolve, and a title pawn may help you get your vehicle back on the road quickly.
• Home appliance repairs – Essential appliances in your home mean appliances that you cannot do without, even for a day. This may mean your fridge, freezer, or oven. A title pawn may give you the funds you need to cover a repair to your appliance or get a cheap replacement.
• Late rent or mortgage payments – Missing a rent or mortgage payment can have a large impact on your credit score, dropping it up to 50 points. Establishing a history of missed rent can also lead to eviction. Get the money you need to afford your bills on time to avoid risking your apartment or house.
• Unexpected travel costs – Some people who request title pawns from us do so because they need to travel in an emergency. This may mean traveling for work or traveling to a sick relative.
• Medical expenses – We don’t plan to get sick, which means that unexpected illness can be tough to budget for. A title pawn can help to cover essential medication, surgery, hospitalization costs, etc.

An Alabama title pawn can help when faced with a financial emergency you cannot afford before your next paycheck. However, just remember, before you borrow, to plan for how you will repay the loan to avoid defaulting on your loan.

5. Not Budgeting For Repayments

When you take out a title pawn, you’ll be told exactly how much you need to repay and when. As soon as you have this information, fit it into your budget. Repayment of your title pawn should be a priority.

The last thing you want to do is borrow a title pawn without a plan for how to pay it back. If you miss months of payments, you can default on your loan. In that case, the loan lender can seize your car to make up for the money lost by your failure to repay the loan.

Before borrowing a title pawn in Alabama, plug repayment into your budget. Make it a priority to avoid losing your vehicle. If you feel you can afford to repay the title pawn, you can proceed with the simple approval process.

How To Get Approved For A Title Pawn In Alabama

The approval process for an Alabama title pawn only takes a few steps that you can complete in less than a day. Same-day approval for title pawns lets you get quick access to funds within one business day. Start the process online, and you can get approved in person in less than 30 minutes.

Here is the approval process for an Alabama title pawn:

• Fill out our online form with your basic details
• Speak to a loan representative about title pawn details
• Bring your required items to the nearest Alabama store location
• Have your requirements verified and your vehicle inspected for its value
• Sign the loan agreement to complete the approval process
• Receive your title pawn cash later that day or by the next business day

Borrow Title Pawns In Alabama – Receive Up to $15,000 Today!

Do you need fast financing for an emergency? You can get just that with title pawns from Alabama Title Loans, Inc. You can get same-day approval for title pawns – all credit types accepted. You can even keep your car during repayment. Get started now; fill out our online title pawn form and visit us in person to get approved in 30 minutes!

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.