Getting a Loan For Your Car: A Step-by-Step Aid
There are almost 27 million vehicles on the road in Canada. That’s just a bit shy of one vehicle per person. What’s more is vehicle ownership rates have been increasing.
You may have got your car to get you back and forth to work initially, but a car can also be a smart investment. It has resale value later on.
Did you know you can also use your car to take out a loan? If you’re interested in getting a loan for your car, this step-by-step guide will walk you through.
Think about Why You’re Getting a Loan for Your Car
The first thing to do is ask yourself why you need a loan. Maybe you need some quick cash to help pay bills for the next couple of months. Maybe you need help with the repair bills for your vehicle.
The answer to this question may determine the type of loan you can get. If you need money for repairs, for example, you might be able to get a loan designed to help with that. If you just need quick cash, then a title loan might be the answer.
A title loan means you need to own the vehicle outright. Repair loans don’t always have this restriction. That’s why it’s important to think about what you need the loan for.
A collateral loan may be another option. Collateral loans don’t always need to be on a vehicle, but they often are. They’re similar to title loans, but have a few key differences.
You may also be interested in getting an automobile loan to help you pay for a vehicle. Some lenders will offer vehicle purchase loans to help you do this. If you have a sizable down payment a title loan lender may be able to help you purchase a vehicle.
Research Lenders in Your Area
There are plenty of lenders in Ontario who offer title loans. Not all of them are reputable. That’s why you need to do some research before you apply for any kind of car loan.
Careful research will help you find a trustworthy lender in your area. You should be able to make a short list of lenders who will help you get a loan with your car.
A good lender will have an excellent reputation with the customers they’ve served. They may also offer more than one type of loan, so you may have several loan options with them.
This can help you get the loan you need. For example, if a title loan does not give you enough cash, then a collateral loan might be a good option. If you just need a little bit to handle a minor repair, then a repair loan could be a wise choice.
Not every lender offers all these options. Looking for one who does maximizes your chances of getting the right loan for your car.
Determine Your Car’s Value
Once you have a short list of lenders you’d like to work with, it’s time to take a look at the estimated value of your car. You can do this in a few ways.
First, you can get in touch with your insurance provider and ask them to appraise the vehicle.
You can also take a look at online marketplaces to see how much similar vehicles are selling for. That can give you a rough idea of the market value of your car.
Why do you need to know your car’s value? The lender determines the title loan amount against the value of the car. They don’t want to give you more than the car is worth.
Apply for a Loan
Now it’s time to apply for a loan. Most title loan lenders don’t check credit, so you don’t need to worry that applying for a loan will hurt your credit score. Title loan lenders usually use different criteria to see if you’re eligible. You can always directly ask the title loan lender if they are going to check your credit.
Before you apply, you may want to make sure you’re eligible for an auto loan. It’s often easier to get a title loan than to get a loan from the bank. Most lenders have only a short list of criteria.
You’ll need to fill out the lender’s application. You’ll also need to supply some documents. These might include:
- A utility bill showing your current address
- Two pieces of identification
- A pay stub
- Your driver’s license
- The vehicle ownership
- A valid insurance slip
- Pre-authorized payment forms
Note that some lenders will lend to people who are in bankruptcy or consumers proposal. You may not need to prove employment in some cases.
Some lenders also allow you to apply online for a loan. This is typically faster and easier than making the time to get to the office. You may need to supply more documentation, such as pictures of the vehicle.
If you apply online, make sure you review the lender’s privacy and security. You want to work with a team that will keep your information safe.
Review Terms and Conditions Carefully
When a lender makes an offer, you’ll want to be sure to review the terms and conditions carefully. Some lenders will want to put a tracking device on your vehicle, for example. Others will offer you a larger loan, but you’ll have car payments for longer.
You’ll want to pay particular attention to the following details:
- Amount of the loan
- The length of time you’ll have to pay it back
- Payment frequency
- Interest rates
- Other fees
- Penalties for paying the loan off early
- Penalties for late or missed payments
Not every lender will offer equal terms. If you’re not sure you’re getting a good offer, you can shop around.
Once you have carefully reviewed the terms and conditions and you’re satisfied, it’s time to sign on the dotted line.
Some lenders can get you funds in short order. This may be especially true for lenders who offer eLoans and online applications. If you need funds fast, then this could be a great option for you.
Helping Auto Owners in the GTA
Getting a loan for your car can be a smart way to leverage your investment in it. It can also help you out of a tight spot.
If you need cash and you own your vehicle, then get in touch. A title loan could be just the solution you’re looking for.