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Curious what you need to qualify for a title loan?
You’ll be happy to hear that title loan requirements are pretty simple. No long bank forms to fill out. No waiting weeks to hear back. And best of all, no credit score check!
There are a couple basic things you’ll need though before a lender will approve you. Here’s everything you need to know about title loan requirements–so there aren’t any surprises when you apply.
Here’s What’s Covered:
- Vehicle Title
- Vehicle Condition and Value
- Proof of Income
- Photo ID issued by the government
- Proof of Insurance Coverage
- Know your state’s title loan requirements
Requirements for Title Loans
Title loans are secured loans that use your vehicle as collateral. The lender places a lien on your car title in exchange for cash. The lien is released when you repay the loan — and the title returns to you fully unsolicited.
Keep in mind:
Title lenders aren’t overly concerned with your credit history because your vehicle acts as collateral. Title loans are one of the easiest ways for borrowers with bad or no credit to qualify for a loan. Around 2 million people use car title loans every single year and interest continues to grow. Those are millions of people who turned to their vehicle for fast and flexible funding.
Title loans have straightforward requirements. Though every lender is slightly different, they all usually require similar documents. Below is everything you need to know about each one.
Vehicle Title
This is pretty much item number one.
The most important of title loan requirements is having a vehicle title that’s free and clear. No outstanding auto loan amounts and no other lender with a lien on the title. Once that’s established, you can breathe a little easier. The title also must be under your name.
If you owe money on your vehicle, some lenders will still approve you. But you’ll need enough equity in the car to cover the desired loan amount. Not having a lien on the title proves to the lender there’s no legal battle over who owns the vehicle.
Vehicle values are determined using third-party tools like Kelley Blue Book. That value directly correlates with how much you can borrow–usually between 25% and 50%.
Condition of Vehicle and Value
As mentioned above, the vehicle is extremely important. Not only does the lender need the title in your name, but they also typically run your vehicle’s value. Things like mileage, condition, make and model and age matter more than you might think.
New cars can qualify for upwards of $10,000. But an older vehicle with high mileage may struggle to qualify for $1,000 or more. Knowing your car’s estimated value beforehand can help set expectations when speaking to lenders.
Submitting proof of income doesn’t hurt either. If you can prove to the lender you have the means to repay the loan, they may approve you for a higher amount.
Photo ID Issued by the Government
A government-issued photo ID is non-negotiable. Every lender requires an applicant to provide photo identification. It’s used to confirm your identity and ensure the name on the title matches the borrower’s name.
Typically this means:
- Driver’s license
- State ID card
- Passport
If there is a discrepancy between the title and ID, you’ll need to get that sorted first. Otherwise the lender won’t have any way to verify you’re who you say you are.
Proof of Income
Odds are the lender will want to verify you have a job. Income isn’t strictly defined as employment either. As long as there are documents to show you have money coming in each month, you qualify. Here are a few examples of what else can qualify as proof of income.
Acceptable documentation includes:
- Employer paystubs
- Bank statements
- Social Security/Award letters
- Self-employed documentation/invoices
While lenders aren’t looking to complicate the process, they do need some form of reassurance the loan will be paid back. Income verification provides that comfort.
Proof of Insurance Coverage
Many title lenders also want to ensure your vehicle has active insurance. It’s a simple protection should something happen to the vehicle. Totaled? Stolen? Insurance covers the value of the vehicle so neither you nor the lender take on a huge loss. Think of it as added protection should the worst happen. Something as simple as your insurance card will usually suffice.
State Requirements for Title Loans
Here’s where it starts to get interesting. Each state has different rules governing title loans. From maximum loan amounts to allowable interest rates and repayment terms. Once you know the title loan requirements for your state, there won’t be any surprises when you receive your loan agreement.
Florida title loan requirements, for instance, follow Florida’s Consumer Finance Act. That act sets the rules all lenders must adhere to, including loan terms and what fees can be charged. Knowing these rules ahead of time can help you navigate the process more smoothly.
Most title loans can be approved in 15 minutes or less if you have all the required documents. Make sure you have everything handy before you apply–whether that’s online or in-person–and you’ll get your answer even quicker. Do your research based on which state you plan to apply in.
Additional Resources and Documents
Not all lenders are created equal. Some may require additional documentation in order to approve you. This list is by no means exhaustive, but here are some of the more common things a lender might ask for:
- Proof of residence — Usually a utility bill or bank statement with your name and address on it.
- Personal references — Some lenders want to speak to a few people you know just to ensure everything checks out.
- Duplicate set of car keys — Some lenders like having a set on hand just in case.
- Photos of your vehicle — Super common for online title loan lenders. They’ll want to verify the vehicle is in the condition you say it is.
Every lender is going to have different tastes when it comes to title loan requirements. As long you have the basics covered, you shouldn’t run into too many issues.
Wrapping Up: Title Loan Requirements
Title loans are pretty straightforward. They don’t have to be confusing, and lenders want you to know that.
They want you to be informed about what you’re signing up for. That’s why they make everything abundantly clear. The lender needs to know you can repay the loan. You need to know the risks involved with using your vehicle as collateral.
Here’s a quick recap of everything covered:
- Vehicle Title (Free & Clear)
- Vehicle Condition and Value
- Proof of Income
- Photo ID issued by the government
- Proof of Insurance Coverage
- Requirements can vary from state to state
Once you’ve gathered all of your information, you’re ready to apply for your title loan. Everything else is just detail work, and you’ll be on your way to funding in no time.
