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What Is a Car Title Loan?
A car title loan is a short-term loan available to anyone who owns a nine year old or newer vehicle. The vehicle needs to be paid off and in your name, or your company’s name. Why? Because your collateral is the title of the loan.
You can borrow up to $25,000 depending on the value of your car or truck.
What If the Vehicle Is in Someone Else’s Name?
It may be your car for all intents and purposes, but what if your name isn’t on the registration?
If your name isn’t on the registration, you don’t have the legal right to use the vehicle as collateral, even if the car is treated like it’s yours.
You’re not out of luck yet. To get a title loan in Canada under the above circumstances, you can ask the person whose name is on the registration to co-sign the loan. Co-signing gives the lender permission to accept the car as collateral.
Don’t worry. You will still get the money and pay it back. The only time a co-signer gets involved is if you go into serious default.
If your vehicle is registered under a company’s name and you are the owner of that company then you can use the vehicle as collateral for a loan, that is, to get a title loan with it. Typically articles of incorporation would have to be shown that lists you as a director of the company.
Can I Get a Car Title Loan in Canada With Bad Credit?
Yes, you can get a car title loan even if you have no credit or bad credit. You may not even need proof of a job, which is a relief in these difficult times.
Because you provide collateral, it secures your loan. All you need to do it pay it back according to the scheduled agreement.
Do I Have to Give the Lender My Car?
No, you can continue to drive your car or truck and still get the loan. Taking away your vehicle has no benefits for the lender. If you don’t have a car to get to work with, it makes life harder for everyone.
That’s why you can drive away with your car and your cash on the same day you apply.
How Long Does It Take to Get the Money from a Car Title Loan?
You can usually get the money within an hour of completing the process, but most applicants get it even sooner. Once all the paper work is done, advancing the funds is the easiest part. The application takes about 15 minutes to complete and process. You may not even need to go into the office to get the loan because the whole request can be completed online as well as by email and fax.
If you’re in a hurry, make sure you have these documents with you when you apply:
- Driver’s license
- Two IDs (birth certificate, passport, health card, SIN card, permanent resident card, citizenship card, an alternative government-issued ID)
- Proof of ownership of the vehicle (the front and back of the whole ownership)
- Proof of insurance
- Utility bill with your address and a current date
- Paystub (if applicable)
- Void cheque or pre-authorization form
- Pictures of your vehicle
You will need eight pictures of your vehicle if you can’t bring your car into the office. These pictures include:
- 1) Left side
- 2) Right side
- 3) Front
- 4) Back
- 5) Odometer
- 6) Front interior
- 7) Back interior
- 8) VIN or serial number (found on the dashboard on the driver’s side or doorpost of driver’s side)
Make sure your license plate is visible on the back photo. But don’t worry about sending a close-up. Additionally, ensure the door VIN photo is legible. The lender needs to check it against your proof of ownership and insurance.
You don’t need professional photos. Cell phone pictures are fine! Just make sure they’re in focus so that the images are a good representation of your car. Look at the pictures that you will send and remember that what you see is what we will see when sent to us. Make sure that the vehicle is clearly in the pciture and not cut off. Also, the documents mentioned above can also be sent after you take a pciture of them with your cell phone. Just have a steady hand all all will be good.
Not sure what to do? Check out this guide to taking great photos of your vehicle.
How Much Can I Borrow?
The amount you may borrow depends on the equity you have in your car.
Lenders use the Canadian Black Book value of your car to determine how much it’s worth. Typically you can then borrow up to 50% of the vehicle’s rough value.
So, if your car is worth between $14,900 and $15,900, according to the Canadian Black Book, you should be able to borrow a maximum of $7,950.
Wondering how much your car is worth? You can use the Canadian Black Book website to get a rough idea for yourself.
Although borrowers can get up to $25,000 based on the value of their car, you should limit what you accept. Just as with any other loan, it’s always better to borrow what you need rather than the maximum amount. When you borrow a more manageable amount, it’s easier to pay the loan back.
How Do I Pay the Loan Back?
When you get approved for your car title loan in Canada, you receive the paperwork that outlines your agreement to repay the loan. You will know what you need to pay and when before you accept the money.
If you have any questions about due dates or amounts, just ask!
Are You Looking for a Car Title Loan in Canada?
In times like these, it’s good to know you have options if you face an unexpected bill or expense. A Canadian car title loan is a fast way to borrow money, and unlike other products, it uses your car as collateral so you can borrow what you need – not what the bank gives you.
Do you have questions about car title loans in Ontario? Curious about our Covid-19 payment relief offer? Get in touch to learn more about how to borrow money using your title.