If you need money quickly, you might be wondering, 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 the majority of applicants can qualify quickly as long as there’s enough security or “equity” available in your car’s title. Someone’s credit score becomes far less important when a lender realizes that there’s enough collateral to fall back on if you were to default on the payment arrangements.
When you go to a bad credit lender for a secured loan, you are putting up your vehicle as security for the loan. The title lender uses your property as collateral, or they may hire one in case they want to 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 the lenders are assuming a lot more risk, and therefore must charge a higher interest rate or APR. If you have a very desirable loan on your car and you have a good credit score, then it might be difficult for you to get this type of loan at the usual lending institutions.
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 go to get a personal loan from a bank, they’re going to tell you exactly how much money you’ll need in five, ten, or twenty years, depending on what you can afford. These are the best, easiest loans to get if you have a desirable credit score. But a car title loan is likely a better choice for many reasons, some of which I’ll explain below.
A car title loan is a risky transaction for the lender. In fact, 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 taking out a loan at a credit union or a community bank where you are most likely to get approved. If a credit union or locality doesn’t offer this type of loan, then the only other alternative is a banking community loan. These places that have stepped up in this now will actually make online title loans, even to people with poor credit. The rates are not quite as favorable, so you’ll have to do your shopping around 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 the 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 the period of 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 rate of interest makes these quick cash loans so lucrative for lenders that they offer them aggressively.
People with good credit typically don’t have to worry about these types of secured loans. Others will usually get these types of loans from car title loan stores, or from online lenders that specialize in bad credit title loans. Online lenders usually will approve your application immediately, because there is no needed credit check. Online lenders will also often give you the money faster than your local lender as it’s much easier to process title loans for bad credit entirely online. The downside to this option is that online lenders don’t often report these loans to the credit bureau. This means that 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 credit 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, then you are ready to look online and begin shopping for the best lender that offers bad credit title loans. This is the tricky part; consider many factors before signing any loan agreements.
- 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 really 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 also how much you are willing to pay for the cash. At least try to make sure the rate of interest is a competitive bit, so you won’t get ripped off.
- Always shop around. Car title loan companies are usually willing to work with any applicants willing to buy the right amount of money. If you already own your home, you can look for a no-doc loan through your mortgage. If that is not an option, shop for a loan with a good rate and reasonable term.
- Always look for the best loan terms and companies that are 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 current title loan regulations in Arizona. Check the latest lending updates in the Grand Canyon state before you sign off on a contract.
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