Are you thinking about applying online for a title loan? Online title loan marketplaces have been growing steadily over the past two decades, and this is, of course, great news for consumers who face an ever-present need for borrowing. Check out this research from the American Bankers Association (ABA):
- 80% of banks have invested or are planning to invest in online services to streamline lending
- 26% of banks have already laid out a system for accessing title loans
- 71% of banks are using third-party online platforms to analyze loan qualification
Is there a clear regulatory framework to protect online loan packages?
The U.S. Federal Reserve has been slow to set up a comprehensive legal framework for the issuing of loans by banks using online platforms – Europe has been far more effective at laying out these plans. However, even if this poses challenges for consumers [read more about legislation here, most people can access title loans online through dozens of leading lenders.
Borrowers don’t realize it, but there are a lot of state-specific factors that influence loan application services and your ability to get a title loan. For instance, lenders are only allowed to offer title loans across vast territories, so most firms provide loans to a few states.
How to get a title loan online
It is a fairly straightforward process and works a lot like any other loan process, except in this case you have to put down one of your assets as collateral. If you’re wondering where to get the loan in the first place, here is a list of the best companies offering title loans:
TMG: This is by far the best place to go online for auto title loans – and it’s also the highest-rated on ConsumerAffairs.Com. Loan applicants can get up to $50,000 processed and approved in the same day, however, in the case of auto loans, you must have cleared off the debt and earn a minimum of $1,500 a month.
Loan Center Title Loans: This company provides a reasonably large platform to fund title loans, and it has been in business for over 13 years. The rates are among the lowest anywhere, and funds can be approved in 24 hours. Applicants should also have employment with earnings of at least $1,500 a month. Bear in mind that Loan Center Title Loans isn’t accessible from all 50 states.
Finova Financial: They have a car equity line that offers low rates and one-year payback plan, not to mention same-day funding and no penalty for prepayment. The car owner must also be lien free and have adequate car insurance including collision coverage. Loans are offered in six states. Check their website for more information.
CaliforniaTitleLoans: Here you will find same-day online title loans (if you live in the sunshine state) and the best part is, bad credit won’t be a feature in your application. They qualify a loan based on the equity of your collateral, and payment terms range from anywhere between 12 and 40 months.
PremierTitleLoans: This is a coast-to-coast company that prides itself in offering affordable rates and quick loan processing. Applicants should have an income of at least $1,500 a month, a co-signer, and they can qualify for a loan even with bad credit. Services are available in most states.
Pros of online title loans
- Simple application: When compared to traditional bank loans, online title loans are much easier to get through, and that makes them perfect for getting quick money. Most online platforms offer 5-minute application forms, and a reply
comes quickly. - Current employment, not a factor: Most people don’t realize this but lenders only ask for proof of income, but they don’t insist on proof of employment. Ability to repay the loan can come from anywhere including a job, benefits,
inheritance, pension, etc. - No credit rating: This is what makes title loans more accessible to the general public. The fact that you don’t need to have an excellent credit rating means that the bank feels the loan is secured by whatever you provide as collateral. The only reason lenders do a credit check before offering title loans is to make sure the borrower isn’t bankrupt or undergoing credit counseling.
- Access to near-instant cash: Since this process takes minutes to finish, anybody can put together a loan on the same day [or within 24 hours] and be able to solve any number of emergencies.
- Direct deposits: These make it easier to access funds to meet your financial needs, that is, once the loan application has been approved.
- Borrow only what you need: The value of your collateral determines the borrowing limit, but you can borrow only as much as you need, provided you don’t exceed the limit. It allows the borrower more freedom.
Cons:
- Title loans have higher interest rates than mortgages, car loans, and personal loans. However, you can reduce interest by paying back the loan earlier than planned.
- Title loans aren’t legal throughout the U.S. To get a title loan you may have to
travel to a state that authorizes them. - Late payment will get you higher charges. If any of the installments are paid late, it raises the chance of increasing the loan balance.
- Lenders place a lien on vehicle titles. This lien is then entered into state records, and the borrower is unable to acquire another loan for the car until the loan is cleared.
- Risk of repossession: The lien placed on car titles usually means that the borrower runs the risk of losing their collateral by defaulting.
- Shorter repayment schedule: Title loans must be cleared faster than traditional loans [some loan packages are offered with repayment schedules as short as 30 days].
Tips on getting the best title loan
Make proper inquiries about lender plans before pursuing a loan. Remember, a longer repayment plan means you deal with lower installments, and therefore more flexibility on your part. Repayment penalties tend to complicate things so watch out for them, and learn about the lender’s online application process. Some websites require an additional phone call or other communication when applying online for title loans [including visual inspection of
collateral] to approve a loan.