For borrowers looking for an option between a personal loan and a payday loan, a bad credit car title loan is a viable choice. Secured loans are the better option because your car title is a lien against your vehicle and credit is available to approve loans. You may wonder how they figure out your rate with a bad credit title loan. Any company like GoTitleLend that funds title loans can easily calculate your payments and figure the interest based on your vehicle’s time and resale value. Secured loans offer some security in these instances; unsecured loans rarely carry that security.
Requirements For Title Loans With Bad Credit
To get a low interest rate on title loans with poor credit, it’s important to be current on loan payments and communicate with your creditors. Even though you can likely be approved for a small amount, y Your credit history will affect your interest rate on a car title loan; higher credit scores will get you lower interest. Some may claim that paying off this type of debt seems more of a positive way of reducing debt than just paying off the high interest loan. Verify this claim for yourself.
A credit score of 700 or more is common these days and even that doesn’t guarantee you will qualify for unsecured personal loans, as they typically require a credit score of nearly 750! This number is important as that is the standard used to establish rates for approval of loans such as a car title loan or a standard pink slip loan. You should contact a credit rating agency to get a copy of your credit.
Interest Rates On Bad Credit Title Loans In Ohio
A recent auto title loan has allowed lenders to enter transactions within a specific disclosure window. This window allows borrowers to receive information about the rates and fees of their loans, upgrades, or payoff terms. The interest rate on a car title loan may vary from around 7% to 75%. Some may even offer rates at 28%; however, these are more commonly used with a typical bad credit score. It is doubtful that creditors may quote rates that low for any type of loan that uses a vehicle as collateral. You might have a lower rate on your car title loan than others. The bottom line is that the APR will be high with any online title loan. Looking at other types of loans near you is best before moving forward with a secured lender.
Approval Time For Secured Title Loans With A Bad Credit Score
In some cases, you can get approved for a vehicle title loan within a few hours even if you don’t have a good credit history. That means you submit the docs, hear back from underwriting and get your cash that same day! Another factor that can delay the approval process is the time it takes to confirm payment amounts, monthly payments, and interest. These regulations and requirements will sometimes depend on your state of residence and there are often delays out of our control. Some states have minimum interest rates of 20%. That is a mind-boggling sum of money here in Ohio! As another example, instead of finding a deal with only the annual interest rate, you find one that has the annual rate and other fees associated, such as the loan application fee, that has an annual interest rate of 19%. EACH brings down the cost of the title loan!
Perhaps the biggest pitfall regarding a title loan is that many lenders do not do your homework or even ask, let alone perform, a credit check. You can be saved from taking your car title loan through these expensive and unscrupulous tactics if you conduct personal due diligence, especially on the lender you choose. Even if you cannot afford a payday or car title loan, this common practice will leave you in the worst situation. When you find a reputable lender, you will save your money.
Guarantee Of Online Car Title Loan Approval With Poor Credit
Car title loans are approved and processed fast as the borrower doesn’t have much to do other than provide a paid off vehicle. Because the underwriting emphasis is heavily weighted towards vehicle equity, all the other underwriting requirements are secondary. Most people who apply for title loans with bad credit will be approved and cash can be guaranteed when a lender knows there’s a vehicle with equity acting as security. There aren’t many other financing offers with a guaranteed funding amount but you should at least be able to borrow a few hundred dollars even if you can’t pass a standard credit check. All a lender wants to see is that you have equity in the vehicle and they can use that security if there’s ever a default. Because of that, they can guarantee most online title loans with bad credit!
When these types of loans are used, the title is held just like a mortgage or a home equity loan. These bad credit title loans are good for someone who otherwise wouldn’t qualify for an installment loan. In most situations, you need a credit score of 700 or higher to get a bank loan, even with a high interest rate! Car title loans for someone with a bad credit history are also useful when the amount to be funded is just enough to fit your budget and not more than what you need.
What Else To Know About Car Title Loans With Bad Credit
There are some bad things you want to know about quick car title loans for poor credit. These loans get approved quickly because there are few credit checks and income verifications to determine qualification. That means you need to take your time to investigate the lender as well as the financing terms. The biggest risk with a car title loan is that one with a previous negative history with your bank can often walk away with a car and your title too. This is especially true of those with bounced checks that bounced or those with insufficient funds.