Can I Get A Loan For The Car I Already Own?
If you have the need for quick cash, taking out a loan using the car you already own for collateral could be a possibility. There are two ways to get a loan for the car you already own.
One way is called a title loan, which most anyone with a clear title can get. In most cases, the companies that give out title loans do not require a credit check. This means that even those that have poor credit can get this type of loan.
With a title loan, you are exchanging your cleared title for a short term loan. Typically these loans are for 60 – 90 day terms. These lending institutions may be more likely to take advantage of consumers because they are not regulated as tightly as most banks and credit unions.
These title loans typically carry anywhere from 30 to 100 percent interest rate. According to CNN, some of these companies charge as high as 250 percent interest on a title loan for the car you already own. Use caution and read the agreement in its entirety, making sure you completely understand the terms of this type of loan.
To find a company that will give you a title loan for the car you already own, go on line and search “title loan companies”. In this situation, you will fill out the paperwork on line to apply for the loan.
Check your local listings, you may also have a title loan company within your neighborhood and this would take less time for the loan transaction, allowing you to get the money faster. Use the same precautions at the store as you would on-line.
In both cases, you will need proof of insurance, name and address, phone number, driver’s license, title, registration and personal references. Proof of income will be required also.
The second way to get a loan for the car that you already own would be to visit your bank or credit union. In this situation, you will secure an installment loan with the title of your car. The good news here is that typically you can get a much lower interest rate than with a title loan.
Interest rates on this type of loan will run anywhere from 12 – 20 percent and the term of the loan will average around 12 months. Note that these are variable factors depending on the value of the auto you are using for collateral and your personal credit history.
In both situations, either a loan with a title company or a loan with a bank or credit union you will have to maintain the payments in a timely manner. Either of these institutions will have the right to repossess your vehicle should you default on the loan in any way.