If you need money in your bank account quickly to pay off upcoming bills, you may have considered a car title loan. But is it possible to get a title loan without losing possession of your car? According to the Consumer Financial Protection Bureau, about one-in-five consumers who borrow using title loans end up having their vehicle repossessed because they are unable to repay their debt.1
Keep reading to learn more about the car title loan process and why a physical vehicle inspection is necessary. There are plenty of alternative loan options to choose from, so consider your choices carefully before making a final financial decision.
What Are Car Title Loans?
A car title loan is a secured loan available in most states. You can apply for an online title loan or visit a participating store in person. The title loan lender will request a lien-free title in your name if you want to borrow money with car title loans. Having a lien-free vehicle means the online title loan company can quickly offer hassle-free cash. A salvage title loan works similarly as a regular title loan, only the car being used as collateral is a salvage vehicle, and may therefore yield a significantly smaller loan amount.
The benefit of car title loans is that just about anyone could qualify. The lending risk is low for secured loans, so having a good credit score is not essential. As long as your car has sufficient equity, you may be eligible to borrow money.
The vehicle title loan amounts depend on the car’s current resale value. If you own a popular model in good condition, you could secure thousands of dollars for wedding ring financing. But if your car is older with cosmetic or structural damage, you may not qualify for car title loans. To verify the condition, lenders may ask for an in-person vehicle inspection. If you apply for an online car title loan, you will have to provide clear and accurate pictures of the car.
The repayment length for online title loans varies by lender. But typically, title loan borrowers can receive months or a few years to pay off the loan. One of the major downsides to car title loans is that interest rates can be expensive. Online title loans have high approval rates, but the cost of borrowing money can leave people struggling with repayment.
A Breakdown of Title Loans That Don’t Require the Car
| Criteria | Description |
| Application Process | – Online application. – Minimal paperwork. – Quick approval process. |
| Loan Duration | – Short-term (typically 15 to 30 days). – Some lenders offer longer terms. |
| Loan Amount | – Based on the vehicle’s value. – Typically 25% to 50% of the car’s value. |
| Fees | – Origination fees. – Processing fee. – Late payment fees. – Potentially more. |
| Interest Rate | – Varies by state and lender. – Can be higher than traditional loans. |
| Collateral | – Vehicle title (borrower usually retains car). |
| Repayment Options | – One-time payment at loan’s end. – Installments (for longer terms). |
| Early Repayment | – Some lenders offer no prepayment penalties. |
| Extensions/Rollovers | – Possible with additional fees. – Can lead to a cycle of debt. |
| Default Consequences | – Increased interest and fees. – Potential legal actions. – Risk of vehicle title being claimed. |
| Customer Support | – Online chat. – Phone support. – Email support. |
| Additional Services | – Refinancing options (maybe). – Loan consolidation offers (may be more affordable options available with other loans). |
Are There Title Loans That Don’t Require the Car?
A lot of online title loan creditors require borrowers to temporarily give up the use of their car. Once a lender approves you for a title loan, you will need to drive the car to a secure lot. The vehicle will remain safe until the borrower has repaid the online title loan in full.
Losing possession of your car, even for a short period, can significantly disrupt your life. Many people rely on reliable transportation to arrive on time to work, take kids to school, and run errands. If you only have one vehicle, your quality of life may deteriorate. Online title loan lenders may not always require possession of the car, but they may charge more fees for convenience.
Can I Lose My Car With an Online Title Loan?
Online title loans are incredibly risky loans because borrowers may risk losing permanent ownership of their car. Title loans have high-interest rate fees, which many people struggle to pay. If you fall behind on payments, you risk having a delinquent account and falling into default.
Default means you have failed to meet the financial obligations of a loan agreement. Once a lender declares you have a delinquent account, you have a limited amount of time to pay your outstanding balance before your car is repossessed! Most online title loan contracts allow lenders to come onto your property and tow your vehicle away. The title loan lender then proceeds to sell your vehicle at auction to recoup the remaining title loan balance.
Although title loan lenders allow borrowers the opportunity to pay missed monthly payments after the car is repossessed, borrowers will likely have to pay towing fees. If you struggled to keep up with title loan payments, you might now find it impossible to pay towing companies.
Online Car Title Loan vs. Alternative Loans
The effects of having a bad credit score include difficulty getting loan approval. Online car title loans are convenient because approval is fast and lenders do not require good credit for qualification. But if you have bad credit, alternative loan options may be better for your current financial situation than an online title loan.
Payday Loans
Payday loans are single payment loans, which means there are no monthly payments. Borrowers are expected to repay the total loan amount within two weeks from the date they acquired money. Payday loans are meant for minor expenses, such as groceries or credit card bills. Many people can qualify to get a payday loan because good credit scores are not required. However, the interest rates can be pretty high.
Cash Advance Loan
A cash advance can help you get emergency cash very quickly. A credit card cash advance allows you to withdraw cash from an ATM, while cash advance loans could help you get money deposited right in your bank account. How much cash you qualify to receive is dependent on your credit score. If you have a bad credit score, you may be ineligible for the maximum loan amount you need to pay for dental work with bad credit.
Traditional Bank Loans
Traditional bank loans can be obtained at branch locations or through online lenders. You may be able to get a significant amount of loan proceeds with a traditional bank loan if your credit is good. The interest rates vary but can be much lower than a car title secured loan.
Personal Loans
Personal loans are an unsecured installment loan option. Personal loan lenders do not require good credit, even though a credit check is necessary. While auto title loans require collateral, you don’t need an asset to get a personal loan. As long as you have a reliable source of income, you could qualify for a long-term financial solution. Personal loans could help you get manageable monthly payments and an extended loan period.
For more information on your loan options, check out the CreditNinja blog for additional financial resources.
No Inspection Title Loans FAQ
A title loan without physically giving up your car allows you to borrow money using your vehicle’s title as collateral, but you can keep using your vehicle during the loan period.
No inspection title loans are specifically based on the value of your vehicle and its title, whereas other loans might be based on credit score, income, or other assets.
You can get title loans online by applying through a title lender’s website, providing necessary details, and uploading pictures or documents related to your vehicle.
An inspection title loan typically requires a physical vehicle inspection to determine its value, whereas some online title loans might not require a physical vehicle inspection but may ask for detailed photographs.
Some lenders have advanced valuation tools or databases that can estimate a car’s value based on its make, model, year, and condition, eliminating the need for the vehicle present during the vehicle inspection.
Yes, most title loan online platforms are designed to be user-friendly. If you encounter any challenges, customer service representatives are usually available to assist.
Research and read reviews, ensure they have transparent terms and conditions, and check if the title lender is licensed to operate in your state.
If you can’t repay, it’s essential to communicate with your title lender immediately. They might offer a rollover or extension, but this could come with additional fees.
Fees can vary by lender. Always read the loan agreement carefully and ask the title lender about any unclear terms or potential hidden charges.
Many online title lenders offer same-day or next-day funding once your application is approved.
Requirements can vary, but many title lenders require borrowers to have full insurance to protect the value of the vehicle during the loan period.
Most reputable title lenders allow early repayments without penalties, but it’s always best to check the loan agreement or ask the lender directly.
CreditNinja’s Thoughts on No Inspection Title Loans
While title loans that don’t require the car may be an easy way to get quick cash, they are not always the best financial solution. High interest rates, brief repayment terms, and the risk of losing your vehicle can make title loans a stressful and frustrating experience. Instead of dealing with potentially predatory lenders like title loan or payday lenders, CreditNinja encourages you to research your options and compare multiple loan offers. That way, you have a better chance of finding a loan deal that fits in with your budget and lifestyle.
You may also consider personal installment loans with the help of CreditNinja, where you can enjoy perks like:
- Flexible repayment schedules
- Fast funding*
- 5-star customer service
- Easy approval requirements
Check out CreditNinja online loans to see if you qualify today!
References:
- CFPB Finds One-in-Five Auto Title Loan Borrowers Have Vehicle Seized for Failing to Repay Debt | Consumer Finance
- What Happens If I Default on a Loan? | Experian
* Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications approved before 10:30 a.m. CT Monday – Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case, the loan if approved, will be funded the business day after such additional verification is completed.
