Our customers often ask if the benefits of taking out a title loan outweigh the risks. In some cases, the risks are too significant, especially if you can’t afford to have your vehicle repossessed or if you can easily qualify for a personal loan based on your credit history. However, many applicants can’t qualify for an unsecured loan, so they turn to a title loan, which uses their vehicle’s equity as collateral. In some states, you can borrow more than $2,500 and get approved quickly, often with funds hitting your bank account in as little as one business day.

Consider The Advantages Of Online Title Loans

Consider someone with poor credit who needs an emergency loan. We know the applicant has little to no chance of approval because of their low credit score. Many banks and traditional lenders will deny the application, since most only look at a borrower’s credit history. But did you know someone with that same credit score could still get fast cash by taking out a loan? Using their vehicle as collateral, that person can be funded within a day or two of applying online. Even better, you can complete the loan process and keep your car. The lender will want you to hand over the pink slip and pass a vehicle inspection.

The application process is usually easier than you would expect, and that may be the biggest advantage of title loans over other loan offers that rely on traditional underwriting based on your credit history. Getting a lending decision from a big bank or mortgage lender can take days or weeks. Even some payday advance services require you to submit many documents just to get a few hundred dollars. With most services, you complete an easy application and receive online approval within minutes or hours. After that, you can expect an in-person vehicle inspection, the final step before you receive the loan proceeds.

Car Title Loan Benefits & Advantages

You get your money quickly after an initial approval.

They don’t call it a fast cash loan for nothing! Most online lenders will pre-qualify you in less than an hour, as you really only need a paid-off vehicle and income verification. Many services will give you cash within 1 business day, either by direct deposit or by money order.

You can be approved for a title loan even with poor credit.

We’re often told there is no chance of qualifying for title loans online with direct deposit if you have poor credit, but that’s not true. Many lenders will look past your bad credit history. When you apply for a title loan, you use the vehicle’s pink slip as collateral.

Your car’s value is the main factor in determining your loan amount.

Just like in a situation where you don’t need good credit, most lenders will want to know your car’s status. Is it a newer car with lower miles or an older classic car? Is the original bank or credit union paid off? Do you own the vehicle clean and clear, and can you provide a clear title? Is your car in decent condition, and can it pass an in-person inspection by a trained professional? Those are the most important factors when determining what a lender will let you borrow with a car title loan.

Licensed title lenders must follow state rules

Did you know title loan companies need to be licensed to fund your loan? That’s a good sign when deciding whether these loans are safer than other financing options. Some borrowing options may be questionable, especially if you’re looking to take out an online loan or borrow cash from someone in your neighborhood who isn’t licensed. Stick to legitimate ways to get emergency cash, and consider a secured loan from a licensed lender if you need to borrow cash based on your vehicle’s equity.

Most applicants can keep driving throughout the life of the vehicle title loan.

With a title loan, you can keep driving your car, which is a major advantage over other secured loan options. You must hand over the pink slip, but you can drive yourself to work or wherever you need to go.  After all, what good is borrowing money if you can’t get to work?

Secured loans often have lower fees and interest rates than payday loans or cash advances.

A loan secured by a vehicle may have fewer fees and finance charges than typical short-term loans. As you use a pink slip to back the loan, a finance company can impound or repossess your vehicle if the loan defaults. So, they don’t need to charge as high a fee as you expect with a payday loan. Because of this diminished fee, they are often more affordable than a cash advance.

A title loan may not go against your credit if you find the right company.

You’ll always risk losing your vehicle to repossession if you fall behind on your monthly payments. But that’s a worst-case scenario, and the advantages of car title loans can outweigh that if you budget correctly. If you have enough equity in your car, choosing an equity lender over other online payday loan companies can make sense. Payday loans and cash advance companies will hit you with huge interest rates. Use your vehicle to your advantage and get the money you need.

Jessica Chase

Jessica has been working in the title loan lending industry since 2012. Before that, she managed a team of customer service representatives for one of the largest payday loan companies in the US. Since coming to Premier Title Loans, she’s overseen our sales and marketing department and looks forward to educating consumers on their different financing options. Jessica is always open to feedback and questions related to short term loans!