A car title loan is a loan that allows individuals to use the title of a vehicle they own as security. Car title loans are also known as title loans, auto title loans, vehicle title loans or vehicle collateral loans.
Generally, the terms of a car title loan can last anywhere from 3 months to 3 years. Car title loans are typically easy to qualify for since you are using your vehicle as collateral, meaning there is less risk for the lender. However, there are still requirements that must be met.
What are the car title loan requirements?
Below are some of the requirements that must be met in order to qualify for a car title loan.
Steady income: You must be able to show that you have a steady stream of income to be able to meet your loan obligations.
Clear title: The car title must be in your name, and the car should be lien-free.
Residency: Many lenders will require that you reside in the province or territory where you are applying for a car title loan.
Insurance: For you to qualify for an auto title loan, your vehicle must be insured.
No record of bankruptcy: If you recently filed for bankruptcy, you may find it difficult to obtain a title loan.
While document requirements vary from lender to lender, usually, you will need to provide the following to verify your loan application:
- Your car title
- Proof of income
- Government-issued ID
- Proof of residence
- Vehicle inspection certificate
- Auto insurance card
- Driver’s licence
What happens if your car is stolen or involved in an accident?
Insurance is required for a car title loan as a way to help ensure the lender can recoup their money should the vehicle be stolen or damaged in an accident. You may be required to inform your insurance provider whenever there is a lien on your vehicle.
In the event of vehicle theft or an accident in which the car was written off, the insurance provider might settle directly with the lender. Once they have reviewed your claim, the insurance company will decide whether part or all of the insurance payment should go to the lender, depending on what is owing on your loan.
If the market value of the car at the time it was stolen or written off is less than what you owe, you will be responsible for paying the balance.
What happens if you cannot make loan payments on time?
Your lender may charge you fees for late or missed payments. Continued failure to meet loan obligations will result in loan default.
If you default on your loan, the lender can seize your vehicle, and there may be additional fees associated with the seizure. In some instances, the lender may choose to sue for the balance of the loan instead of seizing the vehicle. In other situations where the vehicle is seized, and the sale does not cover the balance of the loan, the lender might sue for the difference.
Car title loans in Burnaby and Surrey
If you need cash now and are considering a car title loan, we can help at Instant Auto Loans.
Established in 1986, we offer our clients courteous and confidential service, and you will find that we have the best rates in the short-term lending industry.