Title Loan FAQs

A title loan is a secured loan that provides vehicle owners with a way to borrow money using the equity in that vehicle as collateral. This is the shortest and simplest definition, here is a more detailed explanation of what a title loan is.

One of the key title loan requirements that is mentioned frequently is a lien free title. So what exactly does lien free mean? A lien free title means the vehicle is paid for and is free and clear of any and all liens.
A lien is put on a vehicle when it is financed and the lender has a security interest in the vehicle. This can be when purchased new, used, and when getting a title or auto equity loan.

To qualify for a title loan, generally, you will need to meet the title loan requirements. These can vary from state to state and lender to lender, however they generally include the following:
1. A vehicle and a lien free title.
2. Ability to repay the loan.
3. Proof of Insurance.
4. Proof of Address.
5. Government Issued ID.
These are general requirements that are common across lenders; however specific requirements can and do vary. Before applying, you will want to make sure you meet the title loan requirements to make the process go smoother.

Yes. In fact this is one of the main advantages of a title loan. With a title loan you continue to own and drive your vehicle during the loan.
Title loans are a great way to use the equity in your vehicle when you need it without having to sell your vehicle. When you pay off the loan, your title is returned to you and the lien is released.

Each state treats title loans differently and therefore each state has different maximum title loan amounts. In fact, some states have no maximum dollar amount and some do.
Additionally, some lenders have no pre-set maximum title loan amount and others do.
In the case where the state has a high maximum amount, the amount you can borrow will usually be determined by two factors:
1. The value of your vehicle, and
2. Your ability to repay the title loan.
Generally, title loans are limited to 50% of the vehicle’s fair market value.
So, for example, if your car’s fair market value is $8,000.00, in most cases the loan maximum would be $4,000.00. This assumes you have the ability to repay the loan. Learn more about how much a title loan will give you.

No. In fact, in most cases your credit score does not matter a whole lot. Your car is your credit with a title loan so good credit is not necessary. Some lenders, particularly online lenders, may perform credit checks to validate information.
Make sure to find out before applying if this is something that is important to you. No credit check title loans are widely available.

A vehicle’s Fair Market Value is generally the value a bank would be willing to finance the vehicle for if it were sold at a dealership. There are published guides (Black Book, etc.) that provide estimates of a vehicle’s fair market value by using real data from recent vehicle auction sales.
Because these guides use real data (what similar vehicles sold for at wholesale auctions) they are usually the most accurate and can differ from other online resources like Kelley Blue Book and NADA.
Unfortunately, these guides are usually not always available to the general public for free. Both Kelly Blue Book and NADA provide Trade-in values for vehicles which are usually (not always) close to the Fair Market Value of the vehicle. See the post titled “What is my Car really worth” for more information.

Yes, with most lenders. We encourage title loan customers to pay off their loan as quickly as possible to save on interest. The best car title loan companies do not have prepayment penalties. Make sure the title loan you get has no prepayment penalty if you want the flexibility to pay it in full when you can.
You can usually make payments towards your title loan at any time and in any amount. As with any other monthly installment loan, by paying early and paying often, you will pay your loan off sooner and save on interest.

Assuming the vehicle has enough fair market value to lend, yes. Typically, to have enough equity to support a title loan, vehicles should be 10 years old or less with less than 100,000 miles.
Getting a title loan on an older vehicle may be a challenge depending on how much it is worth. However if the vehicle’s fair market value is more than $5,000 you can usually find a title loan.

The retail value of a vehicle is what a dealer charges. This includes a number of costs in addition to the fair market value. The dealer has rent to pay, utility bills, employee salaries and commissions, vehicle repairs and reconditioning, and other costs.
This is the main reason these values differ. Depending on the vehicle, the difference can be significant. When preparing for a title loan use the fair market value of the vehicle to get an idea of how much you can borrow, not the retail value of the vehicle.

Some lenders require proof of income and some do not. More important than proof of income is your ability to repay the loan. It does no one any good to make loans that cannot be repaid.
Note that the ability to repay the loan can come from any source and does not need to be from employment. This source can be from regular employment or any other reliable income source. It is certainly possible to get a title loan without income verification.

Yes, there are online title loan options including completely online title loans funded within 24 hours as well as same day title loans. There are slightly different requirements for online title loans, so make sure you are able to take pictures of the vehicle.

Yes, in fact classic cars make great title loan candidates in some cases. Some title loan companies have year cutoffs, we prefer when the focus is on the vehicle value. Many classic cars have plenty of value and unlike late model cars, they usually do not depreciate.

Title loans can be anywhere from a couple of weeks to several years. Some states have 30 day title loans or title pawns, other states have longer loans with monthly installments.
One thing to keep in mind is that the longer the loan, the more interest you will end up paying. Car title loans are short term solutions, make sure to keep the loan as short as possible to minimize costs.

Yes, you can get a title loan without a vehicle inspection if you apply for and get approved for a specific type of online title loan. You will need to find a completely online title loan with no vehicle inspection.
These loans require vehicle pictures to support the online, or virtual, appraisal rather than a physical vehicle inspection.

While a checking account can make getting a title loan easier, especially an online title loan, it is not a requirement. You can certainly apply for and get funded a title loan without a bank account.

Yes, borrowing money using your motorcycle title is an option if you own your vehicle free and clear. Motorcycle title loans work the same way car title loans work.

Yes, just like with a car loan you can trade your car in and purchase a new one. You will need to let the car dealer know that you do have a loan on the vehicle and let your lender know what you plan on doing.
Additionally, the loan may need to be in good standing for this to occur. Make sure to check your loan agreement and contact your lender.

Unfortunately there is no title loan that can be completed and funded “instantly” or “in 60 seconds”. Title loans are very fast compared to other loans and can be completed quickly, but not instantly.
All title loans, however, including the fastest online title loans do take some time to both process and fund. If time is a critical factor be sure to confirm funding timeframes with your lender. Same day and 24 hour title loans are becoming more common.

Finding the best title loan means understanding how title loans work, how much they cost, and the difference between lenders. With the increase in online title loans, simply searching for title loans near you and visiting the first result is not the best way to find the best title loan.
With many title loan locations, including one near you, and online title loan options, funding the best title loan simply takes some preparation.

Refinancing a title loan is possible in certain situations. It is important to note that not all states allow a title loan refinance (check the laws in your state). If you are stuck in a very high interest loan, then a title loan refinance may save you money.