Title Loans: Everything You Need to Know
December 3, 2019 | Mason Roberts
A title loan – also known as an “auto loan” or a “car title loan” – is an ideal option when you need money fast for an emergency. If you own your car outright with no liens on the title – meaning 100% ownership of the vehicle with no judgments or liens against it – this type of loan might be perfect for you. So, here are the things you need to know.
What is a title loan?
If readers are not familiar, an auto title loan is a short-term loan secured by the title of your car, not the car itself. Because the title of the car is being used as collateral, many people with a below-average credit score can qualify for an Alabama title loan.
When you use your title as collateral for a loan, it means you will receive the car title back upon the full repayment of the loan. The lender holds the title to the car as you are making payments. This exchange enables the lender to not report to any credit agency. Over the years, the process for title loans has evolved and now online applications are available and can make the process fast and easy.
When should a title loan be used?
Unexpected emergencies, such as a past-due debt or a surprise doctor’s bill, are all reasons to get a title loan - also known as a title pawn in many states. As a rule of thumb, online title loans should only be used to bring financial relief during a crisis.
If all your other options have failed, an Alabama title loan represents a way to receive fast cash regardless of your credit score or financial history. Title loans represent a short-term financing option and borrowers can go to brick-and-mortar locations in Alabama or start the process online.
What do you need to qualify?
An online title loan can be quick and simple. First, all credit is welcome because auto title loans do not factor your credit score into the approval process. The title of the vehicle is used as collateral for repayment on your auto title loan, which is why your vehicle must be paid off to qualify. Now, before you head to a location in Alabama, here are the items you will need to have at the ready:
- Your vehicle for inspection
- Lien-free title (which means your car is paid-off and no one else can claim to be an owner of the car)
- State-issued I.D.
- Proof of income
We also recommend shopping around, comparing ratings on the Better Business Bureau, and consulting customer reviews to see if there’s anything you should be concerned about. Compare several companies and examine which one has the best rates and policies for your situation.
Will the Auto Title Loan Lender Run my Credit?
No, the lender will not run your credit score, nor report a missed payment to any credit reporting agency. Title pawns in the state of Alabama are not reported to credit agencies because they are secured by your vehicle’s title. Borrowers with a bankruptcy on their credit history are welcome to apply. In short, all types of credit can qualify for an auto title loan. Many fast-cash loans are given out on creditworthiness, but auto title loans are dependent on a lien-free vehicle and its condition. Situations may vary so please check with your title pawn lender for more guidelines and information.
How much can you get?
The amount of your online title loan will be determined after the inspection of your car. A certified representative will take a few minutes and value the price of your vehicle’s condition against a nationally recognized pricing guide. Again, this process is hassle-free and only takes a few minutes. After the inspection, you will complete the paperwork and have cash-in-hand. Amounts vary for Alabama title loans, but the maximum amount you can borrow is $15,000.
Of course, it is wise to speak to your Alabama title loan lender first to find out more information on loan periods, interest rates, and other fees. Always remember, never take out more than you can afford and know exactly what your payment will be each month and how that would factor into your monthly expenses. It is imperative to factor the title loan payment amounts into your budget ahead of time. This way, the payments will not be a shock. Whenever it comes to your finances, make sure you ask plenty of questions and have absolute clarity before you sign your name on any auto title loan documents.
Do you get to keep your car?
Yes, during the duration of your title pawn, you get to continue to drive your vehicle. As stated above, as part of the title loan process in Alabama, the lender will keep your vehicle’s title and return it upon full repayment. The only way the car will be taken from you is if you fail to pay the monthly payments on your title loan. The terms and conditions on a title loan will vary from lender to lender, so you want to make sure you've done your homework before signing any loan agreements.
How long does the approval process take?
Alabama lenders understand title loans are only used for emergencies, so the process is fast and easy. On average, the process takes around 30 minutes and you can leave the site with cash-in-hand. In Alabama, the approval process for car title pawn is stress-free, and your credit does not come into play.
Where can I get a title loan in Alabama?
If you have read through all the details and you think a car title loan is right for you, then you need to find a location where you can get the process started. Title loans in Alabama are easy to find throughout the Heart of Dixie simply search “Alabama title loans” in your internet browser. Most lenders will let you start the process online to make the timeline even more efficient.