by Ben Sweiry ·
Modified on 3 February, 2023
Title Loans are are available across most states in the US, including California and Texas.
Car Title Loans are similar to payday loans in that they are intended to be a quick fix if you’re strapped for cash or come across an unexpected bill.
Title Loans can often be cheaper than a payday loan as they are a type of secured loan.
Auto Loans are a type short-term loan that use your car, truck, motorcycle or other vehicle as collateral.
What is a Title Loan?
A Car Title Loan, sometimes known as an Auto Loan, is a type of secured, short-term loan which can either come as a cash injection, similar to a payday loan, or in installments, if you decide to go for the installment loan option.
To get a title loan, you must hand over the ‘title’ of your vehicle to your lender, whether this is a car, motorbike, truck or RV. The lender will hold the title as collateral until you have paid off the loan.
Title loans typically last anywhere between 1 to 3 months and can be for any amount ranging from $100 to $35,000, but can last longer if need be.
Car title loans can end up being cheaper than regular payday loans, as they are secured. This means that you are putting up collateral to guarantee your loan. Lenders can offer better rates on title loans because the loan is secured by your vehicle, as they will hold your vehicle until your loan is paid off in full.
Which States Can I Get a Title Loan?
The main states that allow title loan borrowing include;
Pros and Cons of Title Loans
Before you decide to apply for a title loan, you should be aware of the pros and cons of doing so.
Pros
Bad Credit Options: most title loans are available for borrowers with lower credit scores or more complicated credit histories. This is because your vehicle is used as collateral which secures your loan more than a payday loan or installment loan. When you apply online with Dime Alley, we only carry out a soft credit search which doesn’t leave a footprint on your credit report!
Fast Approval: from the moment you apply, you could receive your funds in a matter of hours!
Good Rates: our lenders will offer you rates that vary depending on your credit and income, and using your car as collateral could reduce the rates on your auto loan!
Cons
Risking Assets: Car title loans can put you in a difficult position. If you are unable to repay your loan, you may rack up a large debt burden or potentially have to hand over your car. Staying on top of your payments will avoid the potential burdens title loans can bring.
What Credit Do I Need For a Title Loan?
Due to the secured nature of the loan, many lenders will not require you to have a good credit score to get a title loan! Therefore, even if you have bad credit, don’t worry – you can still get approved!
However, it is worth bearing in mind that borrowers with higher credit scores will often receive more favorable auto loan rates. This is because a lender will be more assured that they will be able to repay their loan on-time and in full.
When you apply for a car title loan through Dime Alley, we only run a soft credit check ourselves to make sure you meet the basic eligibility requirements. This soft search will not show up on your credit report and won’t affect your credit score.
The basic eligibility requirements that you need to apply include:
- Be a US citizen over 18 years of age;
- Have a live checking account to receive funds;
- A steady income of at least $800 per month.
As long as you meet these easy criteria, you are free to apply for a car title or auto loan with us!