Is it Possible To Get A Pink Slip Loan With Bad Credit?
Most consumers that apply for online title loans have already tried to get an installment loan or cash advance from their bank or credit union. Problem is that most traditional finance options are going to require good to excellent credit.
Most applicants thinks you need decent to good credit to successfully be approved for an online title loan. Fact is, that’s not always the case. Most companies would rather work with a client who has a clearly owned pink slip. By showing the lender you own the vehicle outright you’re letting them know there’s collateral available. That way they can reposes the car if the loan payments fall behind. Now, it’s not ideal to be facing a repossession and most lenders will work with you on repayment plans or alternative payment methods. But that’s the reality of the situation where showing collateral is the first priority.
In most cases where the borrower has bad credit, a typical bank loan or installment loan is hard to obtain. An unsecured loan, if offered, may carry an interest rate that is actually higher than that of the original debt. Same is true with those who apply for online payday loans or cash advances. Borrowers who have bad credit should seek out alternative methods of borrowing if at all possible. The first and best loan offers will always be a low interest loan from your bank or a credit card cash advance. These will have the lowest interest rates but it’s always difficult to get an approval with poor credit. Another thing to consider is that you need to fill out multiple loan applications. This is the same principal as if you applied for a credit card or mortgage. The more firms you contact and have working against each other the better it’s going to be when you get the finance terms. That way you can settle on a car title loan with a reasonable interest rate is obtained.
If you apply with multiple companies who provide online title loans the odds are high that you will run across scam companies. It was recently reported that multiple offshore scammers have moved from payday loan scams to those that involve the title loan industry. Be careful and always research the company you work with. Once a potential borrower starts filling out loan applications, his or her information is shared by the credit reporting agencies with outside entities. This practice makes it easy for unsuspecting consumers to become targets of scam unlicensed lenders. Consumers with bad credit are especially vulnerable because they have limited choices. Some applicants are desperate to find any lender who will guarantee them a loan. Watch out for unsolicited calls, e-mails, or letters that claim that an approval guarantee for your pink slip. Likewise, if a lender asks for money in advance for “an “application fee,” or for the “first month’s payment,” this is likely a loan scam. Most reputable title lenders will deduct their fees from the actual loan amount that is obtained.
You shouldn’t be denied if you own a paid off vehicle
In some cases, a lender will require a security deposit because his or her credit score is lower than anticipated. Don’t do this as it’s likely a scam. Even if you have credit that doesn’t always factor into the lending decision. Yes, a title loan company may check your credit and ask for employment or job references. Some companies will also ask for bank account information or try to verify a checking account. This is normal when working with a reputable lender as it’s often part of the verification process. Whatever you do, don’t send payment to a company that says it’s a requirement for those with bad credit. Once payment is sent, the auto equity lender will disappear. Consumers who suspect that they are victims of a title or payday loan scam should contact the FTC and the police. Fraud alerts should be filed with each of the major credit bureaus (Experian, TransUnion and Equifax). Victims of cash advance fraud should also obtain copies of their credit reports and report any unusual activity.