Title Loan Debt
Before we can talk about title loan requirements, it’s essential to iron out the wrinkles on what title loans (or auto loans) are. Unlike payday, cash advance and signature lending solutions, this type of short-term lending option is an installment plan that doesn’t look at your credit history to determine your eligibility. Instead, your motor vehicle title is briefly relinquished to the lending agency in exchange for the loan money, and this is used as collateral until you’ve finished paying off your debt.
Of course, the idea of using a title as collateral has everything to do with your motor vehicle. Without the vehicle, the title isn’t worth anything. The whole point of the title is to provide a legal representation of the vehicle that includes the VIN, listed owners and other details that identify the who and the what behind your land- or water-based automobile. However, that also means that the vehicle itself is factored into your final borrowing power with auto equity title loans in Tampa and anywhere else in Florida.
The Factors and Why They Matter
One of the first questions many people ask about title loans is how oh how it’s possible for any lending agency to assess a loan plan without checking out a client’s credit history beforehand. The answer is, magic. Just kidding — there are actually three conditions that must be met, but because of how basic they are, it’s pretty easy to get your foot in the door with title-based lending solutions. The only hold-up for most people is whether they’re willing to risk their vehicle for the cash since failure to repay the loan can eventually lead to repossession.
Let’s go over the three chief title loan requirements and why every lending company of our type and caliber needs to collect this information:
1. Income Amount and Stability
First on the list is how much you’re making and with what degree of consistency. Freelancers are affected by the stability aspect because they typically make variable income on a month-to-month basis, but this isn’t a problem if their median exceeds the requirements to repay the loan on time. The reason we need to know about your employment situation and see pay stubs or your deposit history is to affirm your capability to repay the loan in timely fashion. If you’re not making enough to support the amount that you’d like to borrow, then you may have to settle for a smaller loan.
2. Title Clarity
This is a subject that many clients need clarification on — no pun intended. Title clarity describes the absence of holds, liens, fees or restrictions on your title. A clear title has none of these issues, which not only streamlines the process of exchanging the title for the loan money but also minimizes the expense on our end should we need to seize your vehicle in the event that you fail to pay off the loan on time. It’s still possible to use a title that isn’t clear, but doing so will almost certainly limit your borrowing power.
3. Vehicle Fair Market Value
A commonly known aspect of title loan requirements is the market value listing of your vehicle as dictated by reputable agencies such as Kelley Blue Book. Assuming your income looks great and your title is totally clear, a vehicle that’s in poor shape can still spoil the amount that we can ultimately lend you. The reason for this is none other than the before-mentioned fact that repossession is the fallback option in the event that you don’t pay off your auto loan within 30 days of delinquency. If the vehicle isn’t worth what you’re borrowing, we’re taking a major risk.
Don’t Sweat the Small Stuff
There are a few additional points to keep in mind, all for your benefit:
- Your title isn’t modified in any irrelevant or harmful manner while in our possession, and it returns to you in the same condition that it was furnished once you’re all paid off.
- Titles for land- and water-based motor vehicles are accepted at most title-based lending offices.
- The physical vehicle itself is never touched while your loan is out. This is why we take the title instead, allowing you to drive your vehicle as usual while you pay us back.
- Believe it or not, you can meet title loan requirements while you’re collecting government benefits such as disability and unemployment. However, these conditions may severely limit how much you’re allowed to borrow.