Short-term loans are generally easier to come by than your average personal loan — and title loans can be even easier since you’re putting your car up for collateral. But you still need to meet a few basic requirements to qualify. Your state also has laws that could affect the standards to get a title loan.
What are car title loan requirements?
Car title loan requirements vary by lender and the state you live in. However, you’ll likely need to meet some of the following criteria to qualify:
Steady income. While you might not necessarily need to be employed, most lenders require you to show that you have money coming in regularly.
Clear title in your name. The title must be in your name and can’t be used as collateral on another loan.
Age of majority. You need to be older than 18 in most states to take out any type of loan. You must be 19 in Alabama and 21 in Mississippi to get a title loan.
Residency. Some lenders might require you to prove you’re a resident of the state where you’re taking out the loan. Title loans also aren’t legal in every state, so you might not be eligible for a title loan at all depending on where you live.
Insurance. Depending on where you live and how much you borrow, you might be required to have basic car insurance coverage for your vehicle.
No bankruptcy. You might have trouble qualifying with some title loan providers if you’ve filed for bankruptcy in the past few years.
Title loans for service members
Even if you meet all of these requirements, you might have trouble qualifying for a title loan if you’re a member of the military. That’s because federal law requires lenders to charge no more than 36% APR on a title loan with a term of less than six months. They also must provide special disclosures to military members.
While some title loan companies are willing to make these exceptions, many won’t lend to members of the armed forces. Dependents of servicemembers might also have trouble qualifying.
What documents do I need for a title loan?
To make sure you meet all requirements, lenders typically ask for documents to verify your application. The documents required to get a title loan can vary between lenders. Typically, you have to provide the following:
Your car title. You must bring your car title with you when you apply for a title loan. Online lenders might require you to send it in the mail.
Proof of income. Lenders often ask to see recent pay stubs, bank statements, receipts from benefits or any other evidence that you can afford to pay back your loan.
Government-issued ID. A government-issued photo ID like a driver’s license or passport helps lenders verify your identity.
Proof or residency. Those that require you to live in a particular state might ask for a recent utility bill, mortgage or lease agreement, or any other proof that your address is current.
Vehicle registration. Some states might require you to provide your vehicle’s registration.
Personal references. While uncommon, some title loan providers like Cash 1 Loans ask for multiple references from people who can vouch for your character.
Proof of insurance. If you’re required to have insurance to get a title loan, you might need to bring your auto insurance card with you.
Loans that sound too good to be true often are. If a title loan provider advertises how easy it is to qualify for a loan, it could be a sign of a predatory lender — especially if it “guarantees” approval. Most reputable lenders make an effort to check that you’re able repay the loan by looking at your income or credit. Minimal requirements could be a sign of:
High rates. Lenders that don’t check your credit or income often assume the worst and can charge higher rates than others.
Unnecessary add-ons. Others might use it as an excuse to include products you don’t need like extra insurance to inflate the price of your loan without increasing the APR.
Bait-and-switch schemes. Providers that advertise title loans with low requirements might also be a tactic to sell you another loan with less favorable rates and terms.
Generally, you’re better off working with a lender that has more requirements, even if you have poor credit or low income.
Title loan alternatives that are easy to qualify for
Don’t think you can qualify for a title loan? Live in a state where they’re illegal? You might want to look into these alternatives instead:
Payday loans. If you just need a few hundred dollars or less as soon as possible, a payday loan might be able to help. You don’t need good credit to qualify, though APRs can easily top 700% and they aren’t legal in all states.
Installment loans. You might want to consider installment loans if you need to borrow between $2,000 and $10,000 and have poor credit. These tend to be more expensive than title loans, though you don’t risk losing your car.
Not necessarily, since most title loan providers require you to receive your funds in person. However, not all providers advertise how they’ll disburse your funds — and some may need to check your bank account to verify your income.
No, title loans require you to have a lien-free title, meaning you can’t be using it as collateral for another loan. If you still owe money on your car, you might want to look into auto equity loans or short-term loans that don’t require collateral like a payday or installment loan.
You can, though you might need to apply for the loan along with the person you share the title with. For example, Ace Cash Express requires you to both come to the store when you apply for a title loan.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 950 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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