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Car Title Loans – How They Work

By MattJones

California residents often face unexpected financial burdens, such as car repairs, health care fees or housing expenses. Times like this call for extra cash by means of a loan. Which can then lead you to wondering how car title loans work in California, and that’s what we’re about to answer.

Traditional loans are an option if you have great credit and don’t mind waiting days or weeks to get the cash. If you want to get the cash fast and don’t want to worry about your credit, an auto title loan can be a great option. There is less paperwork involved and much less hassle.

Auto title loans are designed for the types of situations mentioned above. You can get the fast cash you need, without being forced to sell assets or further compromise your emergency funds. The equity of the vehicle is used to determine if you qualify, as well as the amount you can borrow. These types of loans have a less stringent process, are less stressful and are much faster. Title loans in California can be done online and be approved in as little as 30 minutes.

Watch this video or continue to read the article below.

9 Things To Know About How Title Loans Work In California

1 – Qualifying for a title loan may be easier than you think.

The most important factor to qualify for a vehicle title loan is that you must own the car that can be used as collateral. Whether you have a car, motorcycle, RV, SUV or truck, you can qualify for a car title loan in California. Because this type of loan is based on the equity of your car, you will be required to own your car outright.

If you are still paying off your car, then the title still belongs to the bank, and you won’t be able to use it as collateral. Other basic requirements to apply for title loans in California include, residing within the state, having a lien-free title, a regular monthly income, and you must be at least 18 years old.

2 – Bad credit? No problem!

Unlike other types of loans, your bad credit shouldn’t affect your chances of being approved for a title loan. Vehicle title loans usually don’t require a credit check. They are specifically designed for people that have damaged credit from a history of late or missing payments on their record. These make it hard to obtain traditional loans and access the cash you need. That’s when car title loans in California become ideal. As long as you own your vehicle and have no liens on the title you could get up to $10,000 or more; even with bad credit!

3 – It may be harder with low income, but not impossible.

In order to qualify for a car title loan in California, you also need to have a monthly source of income. If you have a low income, it may be harder to qualify but you won’t be exempted simply because of it. Also, you must not currently be a debtor in a bankruptcy case or presently intend to voluntarily file for bankruptcy relief.

4 – Your car is collateral for your title loan.

If you decide to get an auto title loan, you must put your car as collateral. This means that you allow the lender to place a lien on your car title, and temporarily surrender the hard copy of the vehicle title, in exchange for a loan amount.

This is the only way a lender has some sort of assurance that the loan they give you will give them some sort of return. Without the title of the car or your credit as a qualifier, the lender would have no way to provide a short term loan because there must be collateral.

5 – You can get a significant amount of cash to cover your needs.

The value of your car is the main factor in determining how much you can get for a car title loan in California. The title loan company determines the value by quickly evaluating the condition of your car as well as its age, make and model. Generally, your car has to be worth no less than $2600. There are lots of tips on how to get your automobile’s value up before you lend it off for some financial help.

6 – Higher interest rates.

Interest rates with auto title loans are usually higher than your average loan. This is due to the short duration of the loan; it is the only way that a lender can stay profitable when working with people of low income or bad credit. That being said, if you work with a credible lender and create a clear plan for paying off the loan on time, you won’t have to deal with the cumulative effects of high interest rates.

7 – You can keep driving your car.

When getting a car title loan in California, you are not selling your car or giving your vehicle away to the lender. You can still keep driving your car throughout the length of the loan, as long as your payments are made on time. You don’t have to worry about getting around and commuting to work. Your title is held by the lender until you repay the title loan in full, in which time the title is returned to you.

8 – If you can’t pay your title loan back on time, don’t panic.

Putting up your car against a loan is not without risk. If you are unable to pay off the loan, then you will lose the car title to the lender. But, if you think you can’t settle on time, try to negotiate with your lender. Although a higher interest rate may be put in place, often the lender is willing to sit down and discuss options with you.

This is way better than risking the loss of your vehicle. The lender is typically more interested in getting their money back, rather than acquiring your car and selling it. It is a good idea to make sure to have a clear plan on how to pay back the money you borrow, before applying for a car title loan in California.

9 – You get your car back.

After paying off the balance of your title loan, the lender will remove the lien it placed on your vehicle and you can have your title back. This process is very simple and all details should be in your loan agreement. If you have questions about the agreement be sure to get clarification before you sign it.

Once you receive your title back from the title loan company, you must submit these papers to the appropriate government agency to clear the lien. In California, this must be done within 30 days of receiving the title back. The DMV will issue you a new title identifying you as the sole owner of the vehicle.

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Benefits of Title Loans Vs Other Loans

Fast Cash – You can get the funds you need much faster with a vehicle title loan versus a bank or payday loan. Bank loans typically require exemplary credit to provide a personal cash loan, and can require lots of paperwork and a longer wait time to get the money. Payday loans often only lend a few hundred dollars and can have sky-high interest rates.

Large Amounts – Collateral loans can help you access up to $10,000 or even more which is ideal when you need to handle unexpected expenses. This much cash is ideal for significant financial emergencies, major home repairs, and so much more. You could get this with a bank loan but not if you have poor credit. A payday loan won’t help you to access this much cash.

Keep Driving – Some people are confused or have misconceptions regarding vehicle title loans. You don’t give up your car. The lender holds your title and you continue driving your vehicle. The only way you’re at risk of losing the car is if you fail to make your payments.

Can Be Done Online – It’s possible to apply for car title loans online while other traditional loan methods typically require in-person applications.  Applying online for title loans has become quite the common method for many California residents. It’s convenient, quick and easy.

Older Cars Can Qualify – Even if you have an older vehicle it could still qualify for title loan cash. While the maximum age is typically 10 years and the maximum mileage 200,000 miles, there are instances where you can still get a title loan with an older car.

Contact The Net Lender for Reliable Pink Slip Loans

If you are still asking yourself, “How do title loans work in California?” even after reading this article, feel free to give us a call at (888) 663-7074. We’ll help you understand the process and answer any questions you may have. Click here to call our Los Angeles number.

We feel it very important that borrowers fully understand what they’re agreeing to when getting a car title loan in California. That said, we encourage you to phone us if you have questions, even if you don’t choose to apply at that time. We’re always here to help and answer any questions we can.

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