Why Would I Not Qualify for a Car Title Loan?
There are two major requirements for a car title loan:
- First, applicants must have a certain amount of positive equity in their vehicle to borrow from.
- Second, an applicant must demonstrate proof that they have the ability to afford a title loan and repay it.
With those two qualifications in mind, it is easy to understand what disqualifies an applicant for a title loan. The simple answer is that an applicant may be denied a car title loan if they do not have enough equity in their vehicle to borrow from, or if they cannot prove they can afford the loan. If an applicant does not have a qualifying vehicle or income, they cannot receive the cash they need through an online title loan.
But, what are some other reasons an applicant may not get approved for a car title loan? Take a closer look!
So, what disqualifies an applicant for a title loan? Before you can understand why an applicant may not get approved, it is important to understand how they work. Title loans are short-term installment loans that allow you to use your car as collateral for funding. The car title is collateral for the loan, allowing you to access a portion of your car’s equity and turn it into cash.
Since the car is used as collateral for the loan, that is why the amount of equity is so important. Your car’s value will determine your eligibility for the loan, as well as what the loan amount may potentially be. Typically, applicant’s can receive 25%-50% of their car’s value, depending on:
- Their State of Residence
- And Their Income/ Ability to Repay the Loan
Now that you know how title loans work, you may be able to understand how an applicant could be disqualified for a car title loan. Here are some of the main reasons a borrower could be disqualified:
- Their Car Does Not Have Enough Positive Equity: Equity is the difference between the current value of the car and what is owed. If you owe more than what the car is worth, or it is in bad condition, you may have negative equity and will not qualify for a car title loan.
- A Lien is Already Placed on the Car: If an applicant already has a lien on the car from an existing title loan, they may not be able to qualify for a title loan. However, if the applicant has just a few payments left, they may be able to get their current loan refinanced if they are not happy with their terms.
- Inability to Repay the Title Loan: A borrower will need to have enough income for a lender to reasonably believe they can afford the loan. If a borrower receives disability benefits or is self-employed, they may still be able to qualify for a car title loan, but they must have the lender’s confidence that they can afford it.
If you are confident in your ability to repay a title loan, you may wonder what you will need to qualify for one. Like any loan, you will need to provide a few documents during your loan application that can prove your identity, amongst other things. Here’s what you will generally need to qualify for a car title loan:
- Proof of Income Through Bank Statements, Pay Stubs, etc.
- Proof of Address Through Recent, Official Mail, like a Utility Bill
If you are like most Americans, you enjoy the convenience of online shopping. You can get so many of your errands done online! Grocery shopping, clothes shopping, and even car shopping can be done through your smartphone or computer. So why not apply for a car title loan online?
With some online title loan options, it is possible to start your inquiry through your smartphone or computer!
So why wait to see if you are qualified for the financial help you need? With loan options like ChoiceCash title loans serviced by LoanMart, you can access a convenient, 3-step inquiry process through your phone today. Just visit the website to get started and place your loan inquiry online! Call 855-914-2945 to learn more about the title loan process and what you need to qualify.