Title loans are quite popular, as they can bring you a significant amount of money – more than typical payday ones – using your car as collateral. To be eligible for this type of loan you need a title, but don’t be too upset if you don’t – there are still other options available.
Is It Possible to Get a Title Loan without a Car Title?
The short answer is no. If you don’t have a car title to offer as collateral your loan becomes an unsecured installment loan and you’re going to get less cash. Providers require people that seek a loan to bring in a copy of their title during an application process. If you’re afraid you won’t get a loan because of your credit score – visit Bad Credit Loans in New Jersey and find a solution to your problem.
What Type of Loan Should I Get Instead?
Even if you’re using your car title as collateral already, or you’ve lost it somewhere, you’ll still be able to obtain a loan backed by your car. It won’t be called a title loan though, but an auto equity one.
What is an auto equity loan and how to get it
Similar to home equity loans, auto equity enable people to borrow against the current value of their cars. For example, if you’d already taken out an auto title loan, and paid 60% of it back, an equity loan would permit you to borrow against 60% that you own.
Keep in mind, that some providers use “auto equity” and “auto title” loan terms interchangeably, even though they differ from each other.
First of all, you’ve got to obtain a duplicate copy of your title from your local DMV, if you don’t have it. In different states, the process may vary. In New York, you can fill the online form and mail within 2-3 business days, while in Texas you need to download and mail it to the DMV or even apply in person.
Then, while applying for a loan, you have to submit the following:
- An application
- An ID like a passport or a driver’s license to prove your identity
- A title replacement fee – in which form really depends on the state
- Other documents required by the specific lender
In addition to all of the above, there are some other requirements you have to meet to be eligible for a loan. They may vary depending on the state and a lender, but in general, they include:
- Being older than 18 years of age (19 in Alabama and Nebraska, and 21 in Mississippi)
- Have a stable income and the means to prove it (paychecks, receipts of some benefits, etc.)
- Have a proof of residence, like a lease, a mortgage agreement or a utility bill
Other Options If You Don’t Have a Title
There are always alternatives to the type of loan you initially thought you wanted, so consider the below list.
- If you want to get a couple of hundred dollars, opt for a payday loan. It’s going to be very fast and quite as expensive as an auto title one. If you don’t have the best credit to get a payday loan – visit Bad Credit Loans in Iowa and see if they can help you.
- When we’re talking about bigger amounts of money, say, a few thousand dollars, try a short-term installment loan. It is pretty fast and has better rates if your credit history is up to par. But don’t worry if it’s not – you’re still eligible, only with higher monthly payments.
- In a case of emergency turn to your local federal credit unions that might offer payday alternative loans (PALs). Those are a good choice you have a not so stellar credit score. Besides, their APRs are capped at 28%! The only downside is that you’d have to become a credit union member.
If you have a title it will make it easier getting your car financed. After you pay for your car one last time, you’ve got to receive the title by mail. If you’ve lost your title or are in need of different info about the procedures in the DMVs, see our guide on car titles.
Things to Consider Before Borrowing
Any loans, either auto title, auto installment or payday ones, come with high fees and APRs, difficult terms and the general ability to land you into the cycle of debt. You might get yourself into an unpleasant situation when you can’t pay back and have to borrow more and more. To avoid this, try other ways to get money before taking out a loan.
- Check out your local resources, like charities, government agencies, and non-profit organizations. They might help you with food, utilities, and other necessities if you’re struggling.
- Ask your landlord or bill provider for an extension on your payment or develop another payment plan.
- Get another job or take on more tasks with paid overtime at your current one.
- Convert your hobby into a business.
- Ask friends or family for a helping hand.
There’s no way to get a title loan without a title, but you can use it as collateral even if you’re already using it for another loan or have lost it. The solution is getting either an auto equity loan or a new copy of your title from the DMV. Just be thoughtful and choose your lender carefully.
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