How Much Can I Borrow on a Car Title Loan?
September 29, 2011
A car title loan, like a payday loan, allows you to obtain a cash loan much more quickly and easily than traditional credit based loans from banks and credit unions. A car title loan does not require a credit check and the amount of money you can borrow is not based on whether you have a good credit score or a bad one. Instead, a car title loan is based on the amount of money that your vehicle is worth.
How Much Can You Borrow On a Car Title Loan?
The amount of money that you may borrow on a car title loan depends on how much your vehicle is worth. Car title loans may be offered based on any type of vehicle that has some significant value to it, whether you have a car, a truck, an SUV, a motorcycle or some other kind of vehicle. As long as you do not owe money on the car and the car is not already acting as collateral for any other loan, and the value of the vehicle is enough to support the lender’s minimum loan size, then a title loan should be available to you.. There may be a few minor easy to meet conditions after that, such as being able to show that you have some means of making the payments.
Your car acts as security for the lender in a car title loan, giving the lender an alternate means of being repaid the money that you owe. While you get to keep the vehicle and continue to drive and use it as normal when you take a car title loan, your lender holds onto the title until the loan is repaid. If you do not make the agreed upon payments on the loan, the lender can repossess the vehicle in order to recoup the money that they loaned you by selling the car.
Because the car is securing the loan, you are generally able to borrow some portion of what the vehicle is worth. Your lender will review the value of the vehicle in making the decision about how much you may borrow and will let you know at the time you apply for the loan just how much they are willing to lend.
Unlike with payday loans, your income is also not going to be the main determining factor in the amount of money that a car title lender is willing to lend you. While a car title loan lender will look at what you make in order to ensure you have a reasonable means of making the agreed upon payments, ultimately, it is the value of the vehicle that plays the single biggest role in determining the amount of money available to you through a car title loan.