In the United States, 22% of adults have an active or outstanding personal loan. The majority or two-thirds of these loans, in turn, came from traditional banks. However, almost a fifth originated from online lenders.
Although some banks offer online loans, most online lenders are non-banks. These include car title lenders who now offer their financial services online. These lenders allow you not only to apply for a car title loan online but also to get your funds via online banking.
So, if you’ve been considering getting a car title loan, you might want to go with the online method. We rounded up the key facts you need to know about these online title loans, so be sure to read on.
What Is a Title Loan?
A title loan is a short-term loan in which a vehicle serves as collateral. As such, the loan amount you can get from this type of loan depends on the current market value of your vehicle. It can be anywhere from 25% to 50% of your car’s value, which can vary based on the laws in your state.
A title loan classifies as a short-term loan as it usually requires full payment within 30 days. However, some states allow consumers to request extensions. For example, under Georgia law, you can extend the loan term for 90 days or even longer.
Extending your contract would make your loan cost more, though, so it’s best if you can pay it back in full within 30 days. The most important thing is not to let your loan go into default. Otherwise, the lender can seize your vehicle, transfer its ownership to their name, and sell it.
How Can You Get a Car Title Loan Online?
The process begins with an online application form that most title lenders now offer. These forms require you to provide your vehicle’s year, make, model, and mileage. You can also provide specific details regarding your ride’s current condition.
Make sure you fill out the form completely, as the lender will base their decision on the details you give. Don’t forget to provide your complete name, address, and contact details. The lender will call or email you once they’ve assessed your eligibility.
A car title loan agent will contact you to request you to provide the needed paperwork. These include the vehicle title, valid identification, and proof of verifiable income.
To provide those documents, you may need to create an online account on the lender’s website. In this case, you can scan and upload the required documents.
If the lender doesn’t have an online customer portal, they may ask you to email the documents. You only have to scan and then attach the requirements to an email message.
The car title must be in your name, and the name on the ID you provide should match the one on the title. The title must also be free of lien, which means it shouldn’t have any outstanding loan. So, unless you’re still paying off an auto loan on your vehicle, you may be eligible.
If you co-own the vehicle, the other owner must also agree to and sign the loan contract.
As for the valid ID, your driver’s license or state ID will suffice.
To prove that you have a source of income, you can provide copies of your paychecks from work. If you are a self-employed individual, you can use your income tax returns or bank statements.
Won’t the Lender Need to Look at the Car?
However, lenders that offer car title loans completely online only ask for photos. This means you only need to take clear photos of every angle of your ride in bright light. They also require a photo depicting the car’s vehicle identification number (VIN).
Once you have those shots, you can then upload them to the lender’s site. The lender may also allow you to email the photos.
In some cases, especially for older cars, lenders may request an in-person inspection. They may either send one of their agents, or they may ask you to bring your car to their nearest branch. They need to inspect your vehicle to gauge how much to lend you.
Even if the agent asks you for an in-person inspection, don’t worry about having to leave your car with them. Many lenders don’t require vehicle storage as part of their terms. This means you can keep driving your car even with an active title loan on it.
Do You Have to Agree to the First Car Title Loan Offer?
No, online car title loan offers are non-obligatory, so you have every right not to accept them. For example, you can back out if you find the annual percentage rate (APR) too high.
If you do find the offer acceptable, though, then you can sign the contract after reading the fine print. Before that, though, make sure that the APR the lender charges is within your state’s limits. For example, in California, there’s a 36% APR cap for car title loans, online or not.
Once you’ve confirmed everything is in order, you can then sign the contract. For online-only loans, you can use your digital signature.
How Do You Get Your Title Loan Funds?
For 100% online car title loans, lenders usually wire the funds digitally to their clients. These are often real-time transfers, so the money should be in your account as soon as the lender sends it. This is the fastest, most convenient method to get your funds.
However, lenders understand that not all borrowers are comfortable sharing their banking info. As such, they offer other disbursal methods, such as branch pick-up and MoneyGram. Some also offer to mail the check to your address.
So, Should You Get a Car Title Loan Online?
Applying for a car title loan online is convenient, and if you qualify, you can get the funds the same day you apply. However, always remember that these loans usually cost more than traditional bank loans.
So, if you can afford to wait, it’s a smart idea to explore your other loan alternatives first. If not, then at least make sure you apply for a low-rate title loan.
Looking for more financial guides like this or even tips on how to make extra cash? Then feel free to check out our other informative blog posts!