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How Do Title Loans Work in California?

By Casey R

 9 Things You Need to Know

California residents often face unexpected financial burdens, such as car repairs, health care fees or housing expenses. These situations can leave you with the need of instant cash, but getting a loan from the bank is not always easy. Often you require good credit or a certain amount of income, not to mention the amount of paperwork needed. If you have ever asked the question “How do title loans work in California?” you will be happy to know this article will help answer that question.

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 quicker. Title loans in California can be done online and be approved in as little as 20 minutes.

When going for a car title loan there are certain factors to consider, here are 9 things to know that will help answer the question: “How do title loans work in California?”

Watch this video or continue to read the article below.

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

Title loan requirements are often minimal in comparison to traditional loans. Less paperwork and personal information is needed. The most important factor to qualify for a 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 and be at least 18 years old.

2. Bad credit? No problem!

Unlike other types of loans, your bad credit shouldn’t affect your title loan application. Car title loans usually don’t require a credit check. They are specifically designed for people that have a damaged credit from a history of late or missing payments on their record.

3. It may be harder with low income, but don’t give up.

One title loan requirement to meet to qualify for a car title loan in California, is a source of income. If you have 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 a car title loan, you must put your car as collateral. This means that you allow a 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 being on the line, it can be very difficult to find a short-term loan.

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 title loan. 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.

How Do Title Loans Work in California

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 cumulative effect 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 when you take out a car title loan.

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. They are usually 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.

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. 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 your title back. The DMV will issue you a new title identifying you as the sole owner of the vehicle.

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.

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