If you need money quickly, you might wonder, can I get approved for a car title loan if I have bad credit? A title loan is designed for people with bad credit, and most applicants can qualify quickly as long as there’s enough security or “equity” available in your car’s title. Someone’s credit history becomes far less critical when a lender realizes there’s enough collateral to fall back on if you default on the payment arrangements.
You use your vehicle as security when you go to a bad credit lender for an online title loan. The title lender uses your property as collateral, or they may take possession of the car or truck. Of course, if payments need to be made, this puts a lot of risk on the lender, and often the lender won’t make the loan unless they have collateral. Online title loans always have stricter approval requirements because lenders assume a lot more risk and, therefore, must charge a higher interest rate or APR. It may be challenging to qualify for a large loan if you’re looking for semi truck title loans or vehicle equity loans with poor credit.
Where To Get Car Title Loans For Bad Credit
Banks are often the best source for a short term loan because they almost always want full disclosure of your finances. So if you get a personal loan from a bank, they’ll tell you exactly how much money you’ll need in five, ten, or twenty years, depending on what you can afford.
Online title loans in Arizona are a risky transaction for the lender. A few underwriting decisions can lead to multiple defaults because the failure rate is very high, much higher than other loans that require decent credit. However, the alternative to a car title loan is usually a loan at a credit union or a community bank, where you will most likely get approved. If a credit union or locality doesn’t offer this type of loan, the only alternative is a banking community loan. The rates are not quite as favorable, so you’ll have to shop before you find something with a favorable interest rate.
Advantages Of Auto Title Loans If You Have Bad Credit
The big advantage to a car title loan is that big money is generally available within a day or two, sometimes within 24 hours. If you have a 9% interest rate and borrow only $1,000, you will pay $100 in interest over a year. If you charge this to $100 an hour or $13 per hour, you will pay $300 per week or $300 per day. The higher interest rate makes these quick cash loans so lucrative for lenders that they offer them aggressively.
People with good credit typically don’t worry about these secured loans. Others usually get these loans from car title loan stores or online lenders specializing in bad credit funding. Online lenders usually approve your application immediately because no credit check is needed. Online lenders will also often give you the money faster than your local lender, as it’s much easier to process an application online. The downside to this option is that online lenders don’t often report these loans to the credit bureau. If you take out a loan with an online title loan company in Phoenix and don’t pay it off quickly, it can still show up on your credit report and lower your Fico score. The more recent the loan, the more effective the loan will have on your credit report.
Consider These Factors To Get Car Title Loans For Bad Credit In AZ
If you have figured out exactly what you need, you are ready to look online and shop for the best lender that offers bad credit title loans in AZ. This is tricky; consider many factors before signing any loan agreement.
- How much money do you need to borrow with a typical bad credit title loan? Some companies will offer up to $10,000 for a title loan, and these days, having a bad credit score doesn’t factor in things during the loan underwriting stage. After determining how much you need to borrow, decide how much cash you are willing to part with every week or day and how much you are willing to pay for the cash. At least try to ensure the interest rate is competitive so you won’t get ripped off.
- Always shop around. Car title loan companies are usually willing to work with applicants who buy the right money. If you own your home, you can look for a no-doc loan through your mortgage. If that is not an option, shop for a good rate and reasonable term loan.
- Always look for the best loan terms and companies willing to give you decent rates for a bad credit title loan. There are a lot of companies out there willing to give up to 50% of vehicle value. The amount you borrow will ultimately depend on the title loan regulations in Arizona. Check the latest lending updates in the Grand Canyon state before signing a contract.
