When times are hard, and you are in need of some cash for an emergency, an auto title loan can be a useful option. These loans offer an easy way to utilize the invested value of your vehicle to get cash fast.A lot of people may opt for this kind of loan rather than use a conventional bank loan or financial institutions mainly due to poor credit scores. How does an auto title loan work? Here are the details.

How an Auto Title Loan Works

Loan requirements and approval

Normally, what you require for a quick auto title loan is your current bgvfd8657r69t789home address and a vehicle that you own (which should be lien-free) and which must be in a functional (driving) condition. Most lenders will require a minimum valuation of the car to be above a certain level, for example, $3500. Usually, the loan amount will be up to fifty percent of your vehicle’s value.You will also be required to be a resident of that state and to provide proof of having a source of income. The source of income can be part-time or full-time employment, retirement or veterans benefits, Social Security Disability (SSD) or Supplemental Security Income (SSI). Upon signing the loan document, you can go home with your car, and leave the car title with the lender.

Typically, to get a car title loan, the lender will also require some information relating to your vehicle. This includes the make of the vehicle, the model, year of manufacture, current mileage readings and the amount of loan you are applying for. Also, the lender will verify with the Department of Motor Vehicles that the vehicle has no lien.

With all this information available, the loan is usually approved in less than an hour by most lenders. Unlike a traditional loan, the vehicle serves as collateral. This makes auto title loans especially suitable for poor with low credit scores. It also makes lenders charge lower interest rates than what is charged for other short-term loans of the same nature such as payday loans.

There are a few additional requirements that an auto loan lender may require. One of them is full insurance for the vehicle which is mandatory for almost all lenders of these loans. Also, the lenders cannot lend to a person who is undergoing a bankruptcy process.They will only lend if the bankruptcy has been discharged. Many lenders will also need you to give them a duplicate set of the vehicle’s keys.

Loan repayment

Most lenders give easy repayment arrangements. Depending on the lender, accelerated repayment may or may not be penalized. It is important to clarify this when applying for the loan. You can repay in person, using online systems or through automated repayment arrangements. Automated repayment plans involve direct payments from your bank account or debit card once the repayment date comes. You will have to arrange with your bank for such payments.

nbkgftde4e657687If you are unable to pay within the stipulated time, the lender may agree to rollover your loan into a new one. This process will add interest and fees to the original loan amount.

Some lenders offer refinance services for auto title loans(from other lenders) that are in good standing in terms of repayment. These can be used as a way of lowering monthly repayments if you feel your current lender has high interest rates.


If you cannot repay the loan for any reason, your vehicle may be repossessed as a last resort. Some lenders may require you to install a Global Positioning System (GPS) or devices which remotely interrupt your vehicle when starting for repossession purposes. These starter interrupt devices may also be used as part of a system that gives you reminders when a loan payment is due. You will, in such cases, be given another code in order to restart the vehicle. In some states, you may be paid the difference between the loan amount and the sale price after repossession.

In conclusion, an auto title loan is an easy and convenient way of getting emergency cash using your vehicle’s value where a normal bank loan(or credit card) is not an option. You can check out more information about it if you do some good research.