A title loan is one of the most flexible ways to get emergency funds—they are easy to secure, you do not need to prove your income, and bad credit is no longer an obstacle.
If you have a car and find yourself in urgent need of cash, a car title loan is a quick way to secure funding efficiently, even without traditional income verification documents.
How Does a Title Loan Work?
Title loans work by using the equity you have on something you own, i.e., your car, as a security for the loan. The title serves as your collateral, allowing lenders to provide you with cash in a pinch.
Just like any other loan, you have the standard paperwork to submit and usual requirements to meet. Nonetheless, title loans offer a lot of benefits to car owners with bad credit.
One of the most significant advantages of a title loan is how easy it is to procure one. All you need is your vehicle—provided it has value—and proof that you have the capacity to repay.
There is no need to go through the traditional loan requirements as it is a non-traditional loan.
Title Loans With No Income
It might be daunting to look for a loan with no income, mainly if you are not engaged in traditional employment. However, due to the flexibility of auto title loans, approval is within reach, even if you are unemployed.
The primary focus lenders look for when determining approval is your ability to pay back the loan. Thus, employment is not mandatory so long as you have a means to repay by the due date.
You can still be considered for a title loan with no job if you receive a regular stream of income. This can be through social security benefits, a significant stipend, financial support from a third party, or simply just proof that you have money coming in. As long as it’s a steady income flow, you meet the income requirement.
Since the vehicle acts as the security of the car title loan, it becomes easier to obtain one even without a good credit score.
Lenders understand that you can be in between jobs but still have the capacity to pay. Many will even provide you with an option to get a quote to determine your eligibility before committing to a loan.
Income verification should be a breeze as long as you have your documents ready.
What Required Documents Do I Need for an Auto Title Loan?
- A Vehicle in Good Working Condition
It doesn’t have to be brand new or at the top of its line, but it must be usable and in good shape. Take into consideration the car’s mileage, its working/driving condition, and of course, its physical state. Vehicles with higher market values combined with an excellent capacity to pay might incur a more significant loanable amount.
- Proof of Identification
These documents can include your government-issued photo ID, driver’s license, and passport. It’s advised that you have more than one ready and ensure that they are still valid at the time of application.
- Proof of Your Capacity to Pay
These documents can include pay stubs, bank statements, letters proving benefits, etc. As long as you can provide proof that you receive a regular flow of money, you will meet the requirement. Get your bank statements in order while you’re at it, just in case it comes up during the title loan vetting process.
- Proof of Residency
Make sure you secure a certificate or utility bills that show your address.
- No Current Loans on the Vehicle
You can only take one title loan on your car at a time because the lender holds onto your car’s title until you fully repay. In other words, the only way to secure a title loan is if you have a title to provide.
Do I Need References to Secure a Car Title Loan?
Not necessarily—as long as your other documents prove that you won’t run from your obligations.
Nevertheless, there are instances where references have allowed a more seamless experience with the lender.
Some lenders might still ask for them as a formality, so we would strongly advise that you have a list of references ready just in case. This should make getting a title loan easier.
Preparing three to four references from positive members in your community whom you have a personal relationship with should suffice, but when in doubt, please consult your lender with their specific reference requirements.
References are not an absolute must, but it can come in very handy!
What Car Requirements Do I Need for Auto Title Loans?
You must either have proof that you are the owner of your car or the vehicle’s title is under your name. (Please refer to the next section if your car is not under your name.)
As part of standard procedure, the lender will ask you to provide your car’s make, model, and year of manufacture. If it’s in excellent working order, that should be enough to get you a quick ballpark quote on how much you can borrow.
If the lender has a prominent online presence, they will ask you for photographs of the car so that they can ascertain its condition. Other lending institutions will subject the vehicle to a stringent inspection to determine its value.
When taking pictures, make sure that you don’t attempt to obscure any problems with your vehicle. The lender has to know the car’s condition and might request that you take additional photos.
Take photos in a well-lit environment, preferably outdoors. There is no restriction in what the photos should be taken with (e.g., professional camera, phone camera), just ensure the photos are clear.
What Happens if the Car Is Not Under My Name?
If the vehicle is not under your name, you might face difficulties obtaining a loan; however, there are workarounds with this particular scenario.
For example, you can visit your local DMV and request for the title to be transferred to your name, making it easier for you to secure a loan.
Requiring the car to be under your name is part of any lender’s procedure since title loans are made for people who directly own the vehicle being used as security.
Does Self-Employment or Passive Income Count?
Self-employment is still considered a form of employment, but you will need to show legitimate proof that you are self-employed or engaged in your own business.
The usual requirements for self-employment are your tax and bank statements.
Note that you can use an auto title loan as a quick business loan if you’re looking for something that provides fast loan approval. This practice is not common, but it is a quick fix for businesses in a jam.
Passive income is just the same as steady income. So, if you’re a landlord or manage passive investments that regularly bring in money, all you have to do is enumerate these investments and procure a copy of your latest bank statements to provide proof of earnings.
In fact, direct loan transfers will work for you as long as your income is over $1,500 monthly after your taxes.
This should be enough to secure a loan without a job from a car title lender.
Do I Need Good Credit to Get a Title Loan?
Good credit scores are not a precursor to a title loan. Many people with low credit scores take advantage of car title loans to get cash in exchange for their vehicles as collateral.
A lot of people have been hampered with securing financial assistance because of their credit score, but an auto title loan doesn’t take it against you if your credit score is poor.
However, the borrower still needs to show their financial capacity to pay off the loan, and the lender might still utilize a credit check.
A car title loan should not be used as an excuse to offload a vehicle but rather as an instrument to secure cash against it.
For People on Workers’ Compensation
In some instances, you might run into a financial emergency while on pause from your current job. This could occur if you’ve had an accident at work and you’re on worker’s compensation or if you’re on paid leave.
All you have to do is to provide proof that you’re still currently employed or just show them any documentation proving your temporary compensation. That should be enough to get you approved for a car title loan without any other problems.
How Much Can I Get for a Title Loan?
The burning question is always how much cash you can get for title loans. The amount depends on the direct lender, the condition of your vehicle, and your capability to pay the lender back.
Most of the time, a title loan can provide you with as much as 20% to 75% of the total value of your vehicle’s equity.
If you have a high-value car with low mileage that was released in the last five years, you could get more out of that than an older car with a significant amount of miles.
On the other hand, sometimes a car with higher mileage can be worth more than one with lower mileage. This is especially true if the vehicle has always been in high demand and it’s deemed more reliable.
When Can I Get the Money?
Lenders can be very understanding when it comes to a financial emergency and will find ways to get you the cash quickly.
To speed up the process, it is critical to complete all your paperwork and prepare your documents before applying. In addition, lenders are ready to answer any questions you might have regarding income verification to ensure you provide the necessary requirements for approval.
You can get your loan via an overnight check, a wire transfer through a third-party, or any other means depending on the mediums that your lender uses.
Car Title Loans Can Be Cheaper
Another reason why car loans can be cheaper is that you don’t have to dedicate your entire paycheck to pay back the loan amount. You can stay within your budget compared to other forms of non-traditional financing.
Also, since your car is the collateral, you’ll only get funding up to how much you can comfortably afford.
What Is the Interest Rate on a Car Title Loan?
The interest rate for online title loans is subject to competitive rates depending on the current market climate. Since it’s a smaller loan than big-ticket funding, you’ll probably be spending a lower amount.
Again, always check with your lender on how much their effective interest rate is and compare rates before deciding.
How Long Do I Have to Repay Car Title Loans?
Given that the amount you’re getting cannot be above 80% of the market value for your car, you can be guaranteed smaller loans that don’t break the bank when it comes to repayment.
The terms of the loan will still depend on the lender, but you can always ask for special consideration or try to negotiate amicable loan terms.
Should I Try to Get Into Car Title Loans?
Auto title loans remain as one of the quickest and most effective ways to get funding when you’re short on money.
You can receive a title loan without providing traditional income verification or having a good credit score, and it’s pretty quick to process.
These are all crucial factors when you’re in a financial emergency.
At the end of the day, it’s just one of the many financial instruments that you have at your disposal whenever you’re in trouble, but it remains to be one of the most flexible.
If you get turned down, ask your lender what went wrong with your documentation or feel free to ask us.
We hope that you get title loans that will help you get the funding that you need. Contact us at any time if you have any other questions or if you want a quick quote, we’ll help you apply online.