How to get an auto title loan when you share a car

If you're looking to take out an auto title loan on your shared car, you might be in for a surprise. Learn more in our guide.

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It’s not uncommon to share a car with friends, family members or your partner. However, when it’s hard to make ends meet and you turn to auto title loans, you might be wondering – can you take out an auto title loan when sharing a car?

What is an auto title loan?

Auto title loans are short term loans for people who may not have the best credit scores. Your lender will hold your vehicle title as collateral for your loan, and you’ll still have full use of your vehicle while you repay the payments. At the end of the loan term – if you’ve repaid the loan in full – you’ll get your title back. If you don’t repay the loan, your vehicle will likely be repossessed.

You can get auto title loans with cars, RVs, motorbikes or boats. Keep in mind you usually need to own your vehicle outright to get this type of loan.

Can I take out an auto title loan if I share my car?

It depends. Only the person with their name on the title can take out an auto title loan. If your name is on the title, then yes, you can take out an auto title loan. If you’re using a vehicle that has a title in someone else’s name, you won’t be able to borrow anything against it, even if you’re the main driver of the vehicle.

What are my options if my name isn’t on the car title?

It’s not the end of the world if you can’t get an auto title loan. These options can help you get the money you need when your budget is stretched thin:

  • Change the name on the title

If you do share your car with a close friend, family member or your partner, they may be willing to transfer the vehicle into your name for the purposes of the loan. Explain to them why you want the title transferred into your name (for finance purposes). You will then have to visit Service Canada with the necessary documentation.

  • Consider an alternative loan

If you have a bad credit score, you may still be eligible for another type of short term loan. Consider these alternatives:

  • Payday loan. Payday loans are available to those with poor credit and are usually available in amounts from $50 to $1,000. Much like their name suggests, these loans usually need to be repaid on your next payday, which means you will have anywhere from 7 to 31 days to pay it back, depending on your work pay schedule.
  • Installment loan. Installment loans generally cover larger sums of money than payday loans and are paid back monthly, rather than in one lump sum. You can usually borrow between $100 and $2,000, with some lenders offering up to $5,000. You will typically have anywhere from three to 60 months to pay back your loan, depending on the lender, how much you borrow and your monthly income.

If you have a good to excellent credit score of 650 or higher, you can consider:

  • Peer-to-peer loan. If you want to borrow money with lower interest rates and fees, consider taking out a peer-to-peer loan. These loans usually come with lower costs, however you have to wait until one or more lenders fund your loan before you receive it. This means if you’re in a hurry for money, you should probably look elsewhere.
  • Personal loan. Banks and credit unions offer personal loans to existing customers, however you will usually have to have a good to excellent credit score. These types of loans offer longer terms, lower interest rates and lower fees than other types of loans.

Bottom line

Even if you share a vehicle, you may still be able to get an auto title loan. If you do qualify for one, make sure the person you share the vehicle with is aware that the car title is being used as security for a loan.

Remember to consider all of your options before you apply to get the right loan for your financial needs, and don’t forget to compare your options to find the best deal possible.

101 guide to auto title loans

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