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Why Car Equity Can Affect Title Loan Approval

Are you late on your bills? Do you need financial help for an emergency but don’t know where to turn? Applying for online title loans could be the answer you’re looking for! Qualified borrowers can receive access to cash within the same business day as inquiring. 

Traditional bank loans look at a person’s credit history when determining their approval. With a title loan, lenders will look at your credit score, but they care more about two other things– how much value your car has and if you have the income to repay the loan.

Car equity is much more important during a title loan inquiry versus your financial history! Learn how to estimate your own car’s equity and what factors can contribute to potential loan amounts using a title loan calculator.

How Does a Car Title Loan Work?

Title loans can offer financial assistance to people who are struggling. They work by allowing a person to borrow off the available equity in their vehicles. Lenders may approve you for funding if your car has some positive equity and you can meet a few other requirements! During repayment, they will place a lien on the vehicle title and remove it after you repay the money.

Title loans are secured because they rely on physical collateral instead of a person’s financial history. Credit scores are why traditional loans can be challenging to obtain approval for! If your credit score is too low, traditional banks may think you’re too irresponsible to borrow money. 

Why Does Car Equity Matter During a Title Loan Inquiry?

Your car’s equity can determine your approval for a title loan and your potential loan amount! You must have some positive equity to qualify for funding. You can estimate your own vehicle’s equity by taking its overall value and subtracting how much you still owe on it in payments. 

Websites like Kelley Blue Book can help you determine how much your car is worth against the current market! If you owe more than your car’s overall value, you may have negative equity.

Title loan lenders will use car equity to decide loan amounts, and they may give you anywhere from 25-75% of your car’s estimated equity. If you own a high-value vehicle, you may receive title loan funding in higher amounts. 

What Types of Cars Get Approved for Title Loans?

Many different cars can obtain approval for a title loan! What matters most is how much equity the vehicle has and if you have the income to repay the funds. Lenders will look at several factors when determining the overall value of a vehicle. Below are examples of things that can affect how much your car is worth:

Make, Model, Style of Car:

The make, model, and style of the car you own can affect how much it’s worth. For example, a brand-new Mercedes may be worth more than an older Toyota Camry. Lenders will consider these factors during a title loan inquiry!

Manufacture Year:

While newer cars are worth more than older ones, that doesn’t mean vehicles from a few years ago will lack worth! If your car is in good shape with relatively low mileage, it should still hold market value. 

Mileage:

However, cars with higher mileage may lose value. High mileage indicates lots of wear and tear; therefore, it may not run as well. It can also signify needing lots of work done, negatively impacting value. If you’ve driven your car an average amount, you shouldn’t worry about high mileage affecting the value. 

Overall Condition:

Title loan lenders will look at a vehicle’s overall condition during an inquiry. Do you take it in for regular maintenance? And fix minor issues that come along? If you take good care of your car, this will reflect positively on its overall value! 

Receive a Car Equity Estimate for a Title Loan Today!

Finding money for an unexpected emergency can be stressful if you don’t have the disposable income to maintain a savings account. Title loans involve borrowing off the equity in your vehicle, which means you don’t need to worry about credit checks! 

If you want an estimate of your car’s equity, you can use this helpful calculator tool free of obligation! You must have some positive equity in your vehicle, be an adult at least 18 years of age, have a qualifying vehicle title in your name, and show proof of consistent income to apply.