You’re in need of fast cash and are considering your options. You own a vehicle free and clear, so you’re considering looking into a vehicle title loan. After all, you can still drive your car while making payments, a situation that sounds ideal. However, you’re wondering: how much can I get with a title loan? Well, good question. Keep reading.
Just What is a Title Loan?
Let’s start here. This is a short-term loan that’s secured by your vehicle, meaning that it serves as collateral. This also means that you could lose your property if you don’t make your loan payments. The other side of that, though, is that you typically don’t need good credit and approval rates are high, compared with other options.
How Does a Title Loan Compare with Other Options?
If you can get a bank loan, more power to you. Such loans are heavily dependent on your credit scoring, though, just so you know. Also, the approval process takes time, likely more time than you have, if you’re considering a title loan. The latter kind of loan is often payable within 24 hours of approval, by the way.
Another prominent option is a payday loan, which can advance you a couple of hundred dollars until you get your next check. The problem here, besides the fact that you only have two weeks or so before the lender wants all its cash back, is that you may not be able to get enough money to satisfy your needs. Also, interest rates are generally higher for such loans than for title loans.
Ideally, you could turn to a family member or friend for a loan. This doesn’t always work out as hoped for, as you likely know, and besides, you may end up straining the relationship, especially if you can’t repay.
How Much Can I Get with a Title Loan?
It depends. Title lenders base their decisions on how much a vehicle is worth and whether you can repay. A title loan calculator can help determine the rough value of your vehicle.
Depending on the company and the state in which you reside, there also are borrowing caps as well as minimums. In Arizona, for example, the minimum for one company is $2,000, while the maximum amount one can borrow is $50,000. Industry-wide, however, you can expect to be able to get up to half your vehicle’s value.
Your Vehicle’s Value
Whether it’s a car, truck, motorcycle, boat, or some other vehicle, lenders will consider several factors in determining how much to lend you. Such factors include the vehicle’s age, mileage, make and model, and overall condition. If your ride’s been in an accident, that will be considered as well.
- Age. Naturally, newer vehicles with all the latest bells and whistles are more desirable, and therefore may net you more. But do not despair if your vehicle is on the older side – IF it’s in great shape and has low miles (the average car owner puts around 12,000 miles on their vehicle annually, just so you know). In that case, you may be able to get as much – if not more – than you could with a newer car.
- Mileage. We’ve touched on this, but it is true that if the miles on your vehicle are on the high side, lenders will see this as an indication of ample wear and tear and will set a loan figure accordingly. And this is true even if your vehicle is newer.
- Make and model. Generally, luxury marques such as Cadillac, Lexus, and BMW will always garner more funds – possibly five figures — even if they are older. Still, the vehicle’s mileage and condition will be factored in.
- Condition. Yes, your vehicle’s value is impacted by those “little” dings, dents, or scratches, as well as a crummy interior.
So, how much you can get with a title loan hinges on the factors outlined above. All things considered, we’ve found that such loans are more feasible than payday loans – and likely more realistic than bank loans. All you basically need is a lien-free title and the ability to repay.