Can I Get A Title Loan On A Financed Car

A title loan can be a convenient way to borrow money by cashing out some equity from your paid off vehicle! There's no stress in worrying about your credit score when you apply for a title loan, and some lenders offer up to $20,000 with same day cash funding. You can get the money in hours and keep using your car while paying off the loan in easy installments! It’s as simple as that! But what if you own money on your car? Can you still get a title loan on it? Not only that, but how does the process work, and are there more steps to qualify than if you were simply looking for a title loan using a lien-free vehicle as collateral?  

Can I Use My Car as Collateral for a Loan?

Yes, you can, in all senses, use your car for a loan; such a kind of loan is called a car title loan or simply a title loan! When you take out a secured loan, you offer something valuable as a guarantee to the lender—in this case, it will be your car. If you fail to pay the loan, the lender, a person, the bank, or a title loan company has all the right to seize the collateral to recover the money you owe. However, remember that the amount you can borrow against your car title depends on its value. Lenders typically assess the car's market value by checking its age, condition, and mileage. The more your car is worth, the more you can borrow.  

Car Title Loans If I Still Owe My Original lender

Using your car as collateral for a loan is possible even if you still owe money on it, but it can be a bit more complicated. When you owe money on your car, the lender holds a lien on the vehicle. If you want to use your car as collateral for another loan, you must pay off the existing loan first! Logistically this makes it difficult to get a title loan if you don't have the actual pink slip to your vehicle. Sometimes, a lender may allow you to take out a loan using your car as collateral while you still owe money, but this often depends on how much equity you have in the car. The difference between your car’s value and the amount you still owe on it is its actual equity. For example, if your car is worth $25,000 and you still owe $5,000, you have $20,000 in equity. Some lenders can allow you to borrow against this equity. One thing to note is that they definitely won't offer a title loan without an inspection or if you have other factors that make it difficult to verify the vehicle's value. It's already challenging to get approved for a title loan if you still owe your original lender, and if you find a company willing to work with you, you'll need to check off all the standard underwriting requirements.    

Title Loans On Financed Cars With Express Car Title Loans

Yes, getting a title loan on a financed car is possible, but it’s generally not advisable. Title loans are short-term, high-interest loans using your car’s title as collateral. Because these loans are usually due within a short period and come with very high interest rates, they can be risky, especially if you’re already paying off another loan on the same vehicle. We recommend understanding the risks involved if you’re considering a title loan on a financed car. Since you don’t fully own the car yet, the title lender will likely require permission from your original auto lender. This process can be tricky, as the original lender may not want to risk losing their collateral to another lender. In many cases, they might refuse or impose strict conditions.  

Is A Car Title Loan Right For Me?

Now let’s come to the deciding part – would a title loan be the right choice if you need cash but can't get approved for a personal loan? For some, yes! For everyone? Not so much, especially if you have good credit and can easily qualify for an unsecured loan! Before deciding whether a car title loan is right for you, weigh the pros and cons. Title loans offer easy access to cash, which can be helpful in emergencies, but they usually have very high interest rates and come with major risks. Our suggestion in this situation is that you consider your financial situation very carefully before deciding to take out a title loan. If you’re struggling with debt or have trouble making ends meet, a title loan can worsen your problems. That is why it would be better to look for alternative options such as personal loans, borrowing from friends or family, or even negotiating with creditors for better terms! However, if, against all odds, you still decide to take out a title loan, make sure you understand the terms and conditions before you sign off on the loan. Remember how much the loan will cost you, and have a clear plan for how to repay it. Last but not least, remember that losing your car could have far-reaching consequences. Call Express Car Title Loans at 888-864-7180 to see if your financed car can qualify for a title loan!