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First Time Applicant For A Title Loan? What To Know Before Applying

5 August 2018 by Albane Francois

Avoiding new debt is one of the best ways to help deal with money issues and restore financial solvency. But there are times when borrowing money is necessary to cover a legitimate need that you or your family is experiencing. For those who cannot qualify for a traditional loan or those who do not have a credit card for emergencies, title loans can provide a means to get cash quickly. If you are considering taking out a title loan for the first time, the following information can be helpful. 

Make sure you have all the documentation needed before applying

Because a title loan, sometimes called a title pawn, can only be done on a vehicle that is unencumbered by any other loans, you will need to provide a lien-free title and registration for the vehicle. Additional documentation needed includes:

• proof of valid insurance coverage.
• proof of identity, usually consisting of a valid operator's license, photo ID card issued by the state, a military ID, or Social Security card. 
• proof of legal residency in the United States.

Additionally, applicants for a title loan will need to show financial documentation to show sufficient, steady income. Proof, such as tax returns or pay stubs, are usually requested to show this.

A vehicle inspection will be required

Since you do not give up possession of your vehicle when obtaining a title loan, the lenders who provide this type of financial service will require you to physically present your car for an inspection before the funds are dispersed. This process usually takes only a few minutes and will involve the lender examining the vehicle and taking photos of it.

This is done for two reasons. One, it assures the lender that the car is in good condition and matches the information provided by the applicant. The second reason is to obtain photographs of the vehicle that can be used to help identify the vehicle if the borrower defaults and a repossession process is initiated by the lender. 

Make sure the amount borrowed is one that you can afford to repay

Depending on the value of your car, it may be possible to borrow several thousand dollars on a title loan. However, doing so can be difficult to pay back, so it is better to request an amount that is easily affordable to repay. 

For more information about applying for your first title loan, or to see if you qualify, contact a reputable title loan services provider in your area. These friendly professionals will be happy to answer any questions you have so that you can decide whether applying for a title loan is the right decision for your financial situation. 

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