What You Should Know About Old Car Title Loans
Are you short on cash and looking for a fast way to secure a loan? If you’re facing an unexpected bill or emergency expense, a car loan can provide the money you need.
With many people facing financial difficulties during the COVID-19 pandemic and other times, car title loans are becoming more popular as a way to make ends meet.
Even if your car is a few years old, it’s still possible to secure financing.
Here’s what you need to know about old car title loans.
What Is a Car Title Loan?
Car title loans are a type of short-term secured loan that uses your car as collateral. The lender registers a lien against your vehicle for the duration of the loan. The lender does not take possession of your car, so you can still drive it while you make the loan repayments.
By using your car as collateral, you can get a loan even if you’ve had an application rejected by a bank or other traditional lending source. In nearly all cases, you can receive approval for the loan on the same day you apply, so you can drive away with the cash in hand, or have it deposited into your account or etansferred to you if the loan is done online.
In Canada, the repayment terms of car loans are typically over a year or a few years, but can be paid back early at any time. It totally depends on what your requirements are. Many borrowers take the loan for a few years to keep the payments low, then simply pay it off early.
What Are the Requirements for a Car Title Loan?
Most lenders require you to own the car outright, so if you’re still making payments on your car purchase, or you lease the car, it may be harder to find a lender. Where a balance is still owed on a financed car (not leased), sometimes the lender will pay off this amount and add it to your loan with them
If the car is registered in someone else’s name, you don’t have the right to take out a title loan, but you can get the person to co-sign the loan for you. By co-signing, they give permission for the lender to use the car as collateral to secure the loan.
If the vehicle is in a company’s name you can still borrow using it is you are the owner of the company.
You will receive the money and be responsible for paying it back. .
To get a car title loan in Canada, you must be over 18. Even if you have bad credit or are currently unemployed, you may still be able to get approved for a loan.
When you apply, you should have the following documents:
- Driver’s license
- Two forms of government-issued ID (birth certificate, passport, citizenship card, permanent resident card, health card, SIN card)
- Car registration to prove ownership
- Proof of insurance
- Recent utility bill showing your address
- Recent paystub (if employed)
- Pre-authorization form or void check for repayment
- Photographs of the vehicle
If you’ve lost your car registration or any of the other documents, you can apply for replacement copies. Having them in hand before you start an application will make the process easier.
How Much Can I Borrow?
The amount of money you can borrow with an auto title loan depends on how much your car is worth. Lenders in Canada use the Canadian Black Book to determine the value of your car. You can then usually borrow 25% to 50% of the value.
You can take your car to the lender’s location so they can appraise the value. If you apply over the phone or online, you can send the lender photographs of the car so they can see its condition and make the appraisal.
How Long Does It Take to Get the Money?
One of the main advantages of car title loans over other forms of borrowing is that they are fast because there is no credit check.
If you provide all the documents you need to the lender, you can often get the cash on the same day. You can apply for car title loans online to make the process even faster. Some lenders can approve a loan in less than an hour.
How Do I Choose a Lender?
Are you wondering how to find the best car title loans? There are two main types of lenders: full-service providers and companies that grant trade loans. If you choose a full-service car title lender, they are more likely to focus on providing good service and helping you with a successful application.
You should research lenders near you to find a reputable loan provider that has experience in car title loans. Choose a lender that has been in business for a long time and has a physical location that you can visit, if need be. As many title loans are done online most borrowers do not visit the lender’s office, but knowing that they have one that can be visited is a plus in establishing legitamacy. Read customer testimonials so you can avoid lenders with excessive negative reviews. Do not worry about a few negative reviews as nobody can satisfy everyone all the time, however, if there are more bad than good, be aware.
Interest rates differ between lenders, so get quotes from a few different loan providers to find the lowest rate. Check the terms and conditions they offer and make sure you understand the fees and charges. However, do not only focus on interest rates as some lenders offer low rates, but also have hidden fees and charges.
How Do I Repay the Loan?
The lender will either give you the money in cash or transfer it directly to your bank account or through an email tranasfer. To repay the loan, you can either give post dated cheques, or you can authorize the lender to deduct the money from your bank account on the payment dates. Most borrowers authorize the money to be deducted form their account through what is called “preauthorized payments”.
You can either repay the loan early, or you can follow the scheduled regular installments that were set up when the loan was granted. Being able to repay the loan early gives you control over your finances.
Get Cash Fast With Old Car Title Loans
Getting an old car title loan in Canada is a fast process that can give you the cash to cover an unexpected expense or cover your bills until payday.
At Fast Action Finance, we’re here to help during these uncertain times. We are one of the oldest car title loan lenders in Canada and have the highest approval rate in the industry. If you’re looking for car title loans in Ontario and want to start with the most understanding finance company, contact us here.