Have you struggled to get an unsecured loan because your FICO score is under 600? Or perhaps you don't have a perfect credit score, and lenders don't want to risk offering you a loan? Most short term personal loans require excellent credit because your credit history tells them whether or not you've defaulted on loans in the past. Unsecured loans include payday loans, bank loans, cash advances, and anything else where you don't have collateral backing up the money you've borrowed.
So what about a bad credit title loan? Have you looked into how these loans work in California and what you need to get approved? With a title loan, you won't need a standard credit check; your vehicle's equity determines a loan approval. Even with poor credit, you can still get approved for a title loan of $2,500 or more in California.
Getting approved with any of the many title loan lenders in Los Angeles, Anaheim, or Fullerton that offer bad credit loans is easy. Most of these companies can underwrite your loan entirely based on your car as collateral, and you'll pay back the loan in 12 to 60 months. Title loans are available for up to $20,000 in California, and you may be able to get your funds within one business day if you have all the required documents.
Remember, most California title loan companies will require a vehicle inspection, and that's the case more than ever with a title loan that doesn't need good credit. A lender must see the car and ensure it has no damage before handing over the cash. They're already taking on significant risk by offering a loan without a credit check, and it would be bad business not to inspect the vehicle to verify it exists! You can still get approved for a bad credit title loan, but you'll need to bring in the car for an inspection so the lender can verify the VIN and confirm the current odometer reading.
Qualify For A Bad Credit Title Loan - What's Required
Most lenders know that if you're applying for a car title loan, you likely have bad credit, so they don't check your credit score. For any title loan with poor credit, you need a lien free car title, which is used as collateral. The pink slip must be in your name; no other lienholders must be shown on the title. Title loan companies will also want to verify income and confirm the car has current registration tags in CA. You may also have to show proof of full insurance coverage on your vehicle with references from recent lenders. Another requirement that's more common for higher loan amounts is a vehicle inspection. With an inspection, your lender will check for damage to your car or SUV. They'll also record the mileage and look for other mechanical or cosmetic issues that could lower the vehicle's resale value.
In California, you can easily qualify for a title loan even if you have a FICO score of 650 or lower! The underwriting requirements are far less than a bank loan, where you must submit multiple documents and wait days to get approved. Compare that to someone applying for a car title loan in Orange County with a vehicle valued at $15,000. With that vehicle value, you can be assured of a loan amount of $6,000 or more, and it should take less than 24 hours to process your application!
Apply For A Car Title Loan With A Good Credit Score
What happens if you have a FICO score of around 700 but want to borrow more cash than an unsecured lender offers? At California Title Loans, we offer access to title loans of $10,000 or more. These loan amounts are much higher than you would get from a personal loan lender as your equity secures the higher loan amount! You can qualify for a title loan without a job or employment verification if you have equity in your vehicle!
Someone who applies for a personal loan from a bank or credit union must show a perfect credit score with no loans in default or bankruptcy. Ideally, any borrower would immediately qualify for an online vehicle title loan in California with low finance charges and decent terms. But that's not always the case with risky short term loans. Any lending company runs the risk of a fraudulent application or unqualified customer.
How Repayment Works For Bad Credit Title Loans
Understanding the repayment process is critical for borrowers with bad credit to avoid a scenario in which they risk a vehicle repossession. Title loans typically have repayment terms similar to conventional loans, often around 12 to 60 months. However, some title loan companies offer longer payment periods if you're willing to pay more interest.
Since a title loan requires your vehicle as collateral, any missed payments can result in a default and eventual repossession. To avoid this, it's best to set up a repayment plan that pays down your interest quickly but also gives you enough flexibility that you can afford to make the payment each month.
Did you know that making consecutive timely payments on your bad credit title loan can improve your FICO score? Many licensed lenders in California report all monthly payments to the different credit bureaus. That means you can see a noticeable increase in your credit score after you've made one or two on-time payments!
What Else To Know About Bad Credit Car Title Loans
Sometimes, there's no getting around a credit check with an online lender, especially if you want to borrow more than $1,000. California has strict credit reporting laws and restrictions, and other cities like Sacramento and Los Angeles have restrictions on how often a lender can check your credit score. When a lender asks for a recent credit report, you must show that you've been paying bills on time and that your debt to income ratio is less than 35%.
Remember that being current on your monthly car payments won't be a factor when applying for a title loan. That's because your vehicle needs to be paid off in full, and you won't likely have any recent car loans on your credit history over the past few months. The pink slip needs to show the car is titled in your name to be approved for bad credit title loans. If you have past issues with a bank or creditor, explain them to the lender.
Most companies that offer online title loans without a store visit understand that issues arise, and those requirements shouldn't make it impossible to get approved. These loans have high interest rates for a reason, and those rates may work for someone who can't qualify for personal loans. They're set up for consumers with vehicle equity who otherwise have no other financial options and must turn to bad credit title loans.