How Much Can You Borrow Against Your Vehicle?
A car title loan is a secured loan that is offered by a lender in exchange for car’s title. The lender will hold the title while the loan is being paid off. The vehicle owner still gets to use the car but understands that if the loan is not repaid the lender has the right to take possession of it. So, how much can you borrow against your car’s title? While the answer depends on a few factors, a car title loan is a great way to access much-needed cash in an emergency. Here’s how you can do it.
To qualify for a car title loan, you need to own a vehicle that has no liens on its title. If you are paying a car loan off, your vehicle has a lien on the title placed by the financial institution that you are paying. Most lenders, like Embassy Loans of Florida, like vehicles that are completely paid off. Some will allow car title loans on vehicles that still have a loan balance.
If you have a vehicle that is paid for and is less than 10 years old, you can obtain a car title loan from Embassy Loans fairly easily. You have to prove your identity and residency as well as have the title. Once you apply and everything is verified, then you can find out how much you are able to borrow.
Most lenders will use some sort of blue book value when determining how much a car is worth. Once the lender has established a value, the loan documents are drawn up. Car title loan companies like Embassy Loans will not permit borrowing against the entire value of the vehicle. Most lenders will only allow borrowers to take 30 to 50 percent of the value of the car or truck. In doing so, lenders are able to recover most, if not all, of any losses that result from a borrower who defaults on payments.
It is a good idea for those considering a car title loan to get an idea of what their car is worth prior to applying for the loan. There are a number of websites online where car owners can put in their car’s information and get a realistic estimate of its value. In some cases, potential borrowers may realize that a car title loan may not be worth it. In others, they may see great potential.
