Car title loans may be the perfect answer for car owners looking for quick cash. They appeal to many, probably due to fast processing and approval time, which quickly avails money. Car title loans are quite similar to payday loans. This is a small loan offered for a short period, mostly 30 days. In exchange, you surrender your car title as a security until the loan is repaid fully.

However, like any other loan, you should understand how much you can access using your car title. Several factors come into play when calculating the possible available car title loans. They include:

The value of the car

The value of the car you intend to use when taking an auto title loan is an important consideration that determines the amount loanable. The total amount largely depends on the market value of your car. Note that the vehicle is evaluated based on the market value and not the retail value.

Therefore, if you have a six-year old vehicle bought at $7000 and its current retail value is $3000, you can access a loan value close to the retail figure of $3000. Before approaching car title loan providers, you can do some market research to determine a ballpark figure of the vehicle’s retail value. Your used car value might be higher than your estimations due to market trends.

State laws

Different states have varying regulations when it comes to car title loans. Unfortunately, these regulations also influence the total amount you can access using your car title. Make sure that you check and understand your state laws before applying for these loans. Fortunately, most car title loan providers serve residents of different states. Therefore, your loan can easily be approved if your car title is registered to any of the states served by your provider.

Interest rates

Like any other loan, car title loans have applicable interest rates. In most cases, these rates depend on your area of residence and other agreeable terms between the applicant and the lender. If the interest rates or monthly payments are high, you can ask the loan provider to adjust the payment terms slightly. Note that these rates depend on whether applicants make timely payments. Most providers work towards providing favorable loan terms to their applicants.

Ability to pay the loan

The total loanable amount also depends on the applicants’ ability to pay the loan. Fortunately, you only need to provide proof of income from a regular or stable job to show your ability to repay the loan. A copy of bank account details is enough to guarantee approval for a high loan amount for self-employed persons.

Endnote

With these terms, you can use a title loan calculator to estimate the possible loanable amount using your car title. If you are satisfied with the amount, you can proceed with a car title loan application. On the other hand, if the loanable amount is low and cannot solve your financial demands, you can find other loan alternatives. Similarly, in the unfortunate event that you fail to clear your title loan, you can opt for a title loan buyout.

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