Who Can Get A Bad Credit Title Pawn?
Alabama Title Loans, Inc. welcomes applicants with any credit history to apply for a title pawn. We understand that a bad credit title pawn may be the only way some drivers can get a significant amount of money for an emergency.
Poor credit is a situation that takes time to recover from, and time is exactly what you don’t have when there’s an unexpected financial burden. A person who is working to build credit may not have the opportunity to put savings away for a rainy day, so when an emergency arises, they aren’t prepared.
Getting a short-term loan is sometimes the only option, but what loan types are available to someone with bad credit?
How Credit Scores Affect Loan Approval
Credit scores are based on how much open credit a person has, their repayment history, and various other factors.
A credit score is the main criterion most lenders use to determine loan approval. For reference, here are the FICO Score categories, according to Experian.
- Bad - 300 (lowest)-579
- Fair - 580-669
- Good - 670-739
- Very good - 740-799
- Exceptional - 800-850
As these scores relate to your ability to get a loan, here are a few guidelines:
- A score between 610 and 640 is preferred for personal loans that can be used for debt consolidation or large purchases.
- A minimum score of 620 or higher is recommended for home loans.
- Score requirements vary for car loans. You can get a car loan with a credit score as low as 500 from some lenders, but it’s recommended that your score be 660 or higher to get a decent interest rate.
These are general rules of lending, but some lenders won’t really consider an applicant with a credit score under 660 for any type of loan.
Loan Options For Bad Credit
So, what is a person to do if they fall into one of these lower credit score categories, yet they need access to cash for an emergency?
A bad credit title pawn could be the solution.
One of the advantages of title pawns is that they are available to a wide range of applicants. Those with good credit, bad credit, or no credit are welcome to apply. Approval is based on the person’s ability to pay the loan back, not previous financial circumstances.
And because the applicant’s lien-free vehicle title is used for collateral, there is less hassle involved in getting a bad credit title pawn than with a traditional loan like the ones mentioned above.
Some title lenders don’t even run a credit check, but even those that do don’t use this information by itself to approve or deny a title pawn.
Will A Title Pawn Affect Your Credit?
If you are attempting to improve your credit, you have to make wise financial decisions to keep that number rising.
Fortunately, a bad credit title pawn won’t affect your credit score in a major way. Title pawn lenders don’t usually report on-time payments, so you won’t get any credit (no pun intended) for repaying your loan on time like you would a bank loan. Alternatively, if the title pawn lender repossesses the vehicle due to default, they usually don’t report to the major credit agencies, either.
With that said, there are a couple of ways a title pawn can affect your credit score:
- A credit check of any kind is considered a hard inquiry and goes on your credit report. An inquiry takes a few points off your credit score, but not usually more than 5. And some title pawn lenders don’t even require a credit check.
- The lender may report to credit agencies if you do not repay it on time, even if they have claimed the vehicle.
Getting A Loan With Bad Credit
When you need cash fast, a bad credit title pawn can really save the day — especially if you have less-than-perfect credit.
To apply, you can fill out an online title pawn inquiry form with some basic information. Once a loan representative has reviewed it, they will call you to finalize the details and provide you with information about your specific title pawn options. This is especially helpful if it’s the first time you have applied for a title pawn.
To complete your application, you will need to meet with the loan representative in person so they can verify the VIN of your vehicle, verify your identity, and collect the lien-free title to the vehicle.
Once this simple process is complete, you will have a decision about your title pawn very soon, regardless of your credit status. Some applicants are approved within 30 minutes.
Get A Bad Credit Title Pawn Today!
If approved, you’ll have cash in hand by the next business day. The entire application process for a bad credit title pawn can take less than a day and requires much less stress and red tape than traditional loans. So, it is completely possible to get a bad credit title pawn with Alabama Title Loans, Inc. If you get started now, you can have your title pawn cash in hand as soon as today or the next upcoming business day!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.