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 simple 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 make payments on the loan, the lender, which could be a person, the bank, or a title loan company, has all the right to seize the collateral to recover the money you owe.

However keep in mind that the amount you can borrow against your car title depends on its value. Lenders typically assess the car's market value by checking factors such as 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

It is definitely possible to use your car as collateral for a loan 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. This means that if you want to use your car as collateral for another loan, you’ll need to 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.

In some cases, a lender may allow you to take out a loan using your car as collateral while you still owe money on it, 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 difficult 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, it is definitely possible to get a title loan on a financed car, 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 of time and come with very high interest rates, they can be risky, especially if you’re already paying off another loan on the same vehicle.

If you’re considering a title loan on a financed car, we recommend you understand the risks involved. 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, which is your car, 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? For some, yes! For everyone? Not so much! Before deciding whether a car title loan is right for you, make sure you weigh the pros and cons. Title loans can offer very fast and 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 before deciding to take out a title loan, you consider your financial situation very carefully. If you’re struggling with debt or have trouble making ends meet, a title loan can make your problems even worse. That is why it would be better to look out for alternative options such as personal loans, borrowing from friends or family, or even negotiating with your 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. Keep in mind how much the loan will cost you in total, and have a clear plan ready for how you will repay it. Last but not least, keep in mind that losing your car could have very far-reaching consequences, affecting not just your ability to work but taking care of your family, and managing daily life as well!