If you've been researching ways to get emergency cash, you have probably come across title pawns. However, most lenders state that you need to own your car outright to get approved. Does that mean you cannot get a title pawn on a financed car?

In the subsequent sections, we will uncover everything you need to know about whether you can acquire a title pawn with a financed vehicle before discussing how to calculate your equity and what to do if you have negative equity.

Can I Get A Title Pawn With A Car Loan Balance?

Title pawns allow you to use your vehicle to secure the loan. Instead of requiring a great credit score, lenders like us at Alabama Title Loans, Inc. use your vehicle's value to establish the amount you can borrow. Since most people own their cars outright when getting a title pawn, we use the entire fair market value to decide how much you can borrow.

However, you cannot borrow a car title pawn if you have a financed car. You must have a lien-free car title to get approved for a title pawn. You will not have that if you are still paying off a car loan balance. Although you cannot get a title pawn on a financed car, you can focus on paying off your car and get a title pawn after it is fully paid off.

How To Calculate Equity In Your Financed Car

The answer to the question, “Can I get a title pawn with a car loan balance?” is no. However, it is still essential to know the equity you have in your financed car.

You can easily find out how to calculate equity in your financed car by subtracting the amount you still owe from its current value. Depending on your financial setup, you may need to pay a final balloon payment to own the car outright at the end of the term. You need to include this amount in your subtraction. 

That said, you will only get an accurate equity figure if you have the precise current value of your vehicle before starting the equation. Luckily, there are plenty of free car valuation tools online that will give you a good idea of the potential sale price. They consider your car's age, make and model, service history, and odometer reading to establish how much it is worth.

Car Title Pawns With Negative Equity: Everything You Need To Know

If you've just done the calculation above and realized you have negative equity, then you're probably wondering whether you can still qualify for a title pawn. Unfortunately, you cannot get a car title pawns with negative equity. While that likely wasn't the answer you were hoping for, you can get out of your negative equity situation in three ways.

These are as follows:

• Transfer to a new vehicle — Dealerships will often encourage you to get a new car on a different agreement with them, even if you're in negative equity. If you desperately need a new car, then this can be sensible. However, it's worth noting that any finance you owe will roll into your new agreement. Look at lesser models to keep your monthly payment manageable.
• Give the car back — Depending on your deal, you aren't tied into paying off negative equity. Instead, the finance provider will take the brunt of it. Provided your car is in good condition and you haven't run it beyond its yearly mileage allowance, you can hand it back without paying anything else.
• Refinance the balloon payment — Only go for this option if you are set on owning your current vehicle. By extending your contract, you can pay off any finance you owe. However, it's worth thinking carefully about doing this, as you may be able to find a better deal by handing the car back and searching for a lower-spec model.

Tips For Paying Off A Financed Car

You cannot get a title pawn for a financed car because we will not be able to place a lien on your car title to process the loan. Before you can get an Alabama title pawn, you will have to pay off your car loan first. There are some simple tips you can follow to pay off your car loan faster, allowing you to use your car title as collateral for a title pawn.

The following are some tips for paying off your financed car:

• Round up payments (ex, rounding a $367 payment to $400)
• Use windfalls like a tax refund or work bonus to pay off your car loan
• Reduce expenses and use savings on car loan repayment
• Make an extra payment every month
• Refinance your car loan for better rates
• Never miss your monthly payments
• Don’t pay for unnecessary add-ons, like extended warranty and maintenance packages
• Prioritize saving and use the money you’ve saved on car loan repayment

When trying to pay off your car loan fast, you must take into account that car loan providers have prepayment penalties. You may have to pay extra if you pay off your car loan quicker than expected. Borrowers should try to avoid any prepayment fees. As long as you stay on schedule and put more money toward repayment, you will pay off your car loan little by little.

How To Get A Title Pawn In Alabama

Getting a title pawn in Alabama is a simple process, allowing borrowers in need of emergency cash to receive their money within one business day. Unlike traditional loans, we don't request loads of documents, nor do we ask you to sit through hours of financial meetings. Instead, the in-person portion can be over in less than 30 minutes!

Here's how to get a title pawn from us:

1. Complete the online form found on this website. We also offer payday loans, so ensure you check the loan type you're requesting before submitting your information. This will ensure we can process everything as quickly as possible.
2. Wait for us to call you. We'll discuss the process, ensure you have the required items, and set up a meeting place. Borrowers must meet with a loan representative at the Alabama store location nearest to them.
3. Bring your required items to an Alabama store to qualify. We will look at your documents to check your name matches before quickly inspecting your vehicle to establish how much you can gain approval for. Your loan amount will depend on your car’s value.
4. If you are satisfied with the amount of money we can offer, we will help you finish the paperwork and show you where to sign. You will receive the money you qualified for later that day or the following business day.

Get Title Pawns From Alabama Title Loans, Inc. – Borrow Up To $15,000 Today!

Ready to get emergency cash today? Alabama Title Loans, Inc. can provide fast financial relief with our easy approval title pawns. Getting an Alabama title pawn does require your car to be paid off, but those with a fully paid-off car can get approved in less than a day. You can also get emergency financing regardless of your credit score.

Get started by filling out our online application. We will then call you to guide you through the next steps!

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