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how do title loans work

How Do Title Loans Work? Everything You Need to Know About Car Title Loans

Are you in need of money fast? Emergencies happen and bills to need to be paid. Your typical Canadian creditor doesn’t care if your money is short this month. When money is short, then you can try getting a title loan to pay for things until you get back on your feet. You make ask yourself, how do title loans work? If you’re the average person, then you probably don't know. If you need cash fast, then it’s a viable option for you. We’ll discuss title loans and when they’re the best option for you. You’ll get the money you need, and you can pay the bills that the average Ontario resident is burdened with.

How Do Title Loans Work?

A title loan works by providing you cash in exchange for allowing the lender to put a lien on your car or truck. For most title loans, you must already own your car and have possession of the car title. You visit the title loan company's office and bring your car registration. They go over all the necessary information such as identity verification, residency documentation, etc., and you allow them to place a lien on your vehicle. There is also the option of getting a title loan by doing all of the paperwork online. In exchange, they give you the money you requested, and you pay it off with the agreed upon time frame. This is the simplest method of explaining how a title loan works, but we’ll break it down into more digestible bits.

Title Loans Are Short-Term Loans

While it may have taken you several years to originally pay off your car, a title loan does not go longer than a typical car loan. It’s not the same thing as a car loan. It’s designed to provide you with enough to take care of your emergency needs but also paid it back at a quicker rate. While car loans are paid back sometimes over five years, title loans are paid back within two years at the most and many times within a few months. This means that the monthly payments can be a little higher than regular car loans because you are paying the principal back faster. If you can’t pay it back within the agreed-upon time, then you can usually roll it over and adjust the payments to suit your needs and ability. It’s important that when you take out the title loan that you speak frankly to the title loan lender so that it is structured to best suit you. Some provinces may limit the number of times you can roll over a loan or if the practice is possible.

How Much Money Can I Get for My Car Title?

How much money you can get for your car title depends on how much it’s worth. If you bring in an older model car that’s not in the greatest shape, then you won’t be able to get a large amount, if any at all. Also, you’re not going to get the full value of the car. Generally, the best you’ll get is about 50-percent of the total worth. The loans aren’t supposed to be for large amounts of money because you need to pay it back quickly. The practice of providing only a fraction of total worth makes sure you don’t get over your head. The loan company’s main desire is to provide you with emergency money when you need it and for you to pay it back. The amount of money you get from a title loan company is usually between $1,000 to $7,500, depending on the total value of your car.

Benefits of Car Title Loans

Car title loans are for you to get the money you need when you need it. If you go for a more traditional bank loan, there’s all sort of red tape to go through. You’ll have to go through a credit check, and it can take days for you to find out if you qualify. You could end up wasting three days waiting for a loan that you don’t qualify for. For someone that needs the money to keep the electricity from being shut off, waiting three days isn’t an option. A title loan lets you get the money that day and in cash. You’ll have it in your hand and ready to use. The short-term nature also makes it perfect for immediate needs. You don’t want to get a loan from a bank that you’ll end up paying for many years. With a title loan, you can pay it back within a month if you wish and get the lien removed from your vehicle. You also know what you’re getting from the start. If you try for some of those online payday loans, you don’t really know who you’re dealing with. They're sending you money from who knows where and you can’t guarantee they’re on the up and up. You could pay off the online loan and then they try taking more money. With a title loan, you speak with a person face-to-face in Ontario. If you have any questions, you know how to contact them. Many online loans don’t have easily available contact information. You could end up losing far more than the amount you borrowed with online loans. A title loan is a way to go.

People Do It All the Time

Many title loan stores have been around for years in the same place or associated with companies that have been doing it for years. Thousands of people take out Canadian title loans every year for their emergency needs. It’s a common method for getting the money you need when you need it. Title loans are quick, easy and transparent with their practices. Many title loan providers have repeat customers who come to them whenever they need funds for an emergency.

Title Loans Are A Great Funding Source

How do title loans work? We hope this explained it in a way that was easy to understand. All that’s left if for you to visit a title loan provider and get the money you need. If you want to learn more about title loans, then please explore our site.
title loan

How to Qualify for a Car Title Loan

Even though Canadians are doing better than before and poverty rates in Canada are the lowest they've been in many years, many Canadians still struggle to afford unexpected expenses. When you've been hit with a sudden expense, you may not want to damage your credit further by putting more charges on your credit card. You may also be concerned that you won't be able to get approved for a loan because of your credit history. You know you'll have more money in the future, but you wish there was a way you could access it right now. If you're in a financial bind like this one, it can sometimes feel like you're out of options -- but you're not. Now is the right time to apply for a Title Loan. But what exactly is a car title loan, and where can you apply for one in the Ontario area? Keep on reading to find out.

The Basics of a Title Loan

Like many Canadians, your car may be one of your biggest investments. Perhaps you've even considered selling it in order to finance your bills or pay for an unexpected expense. But what if there was a way for you to keep your car and get approved for a loan at the same time? That's the premise of a title loan. Your car -- provided you own it in full -- can actually be used as collateral within a title loan. However, your lender doesn't take possession of your car or truck. Instead, you can keep on driving it while the lender simply registers a lien against it. Then, you'll receive up to $25,000. When the loan is paid in full the lender will remove the lien from your vehicle. The lien removal is done online so can be taken off immediately. Please be aware that, in most cases, if your car currently has a lien on it already, you will not be able to apply for the loan. However, there are a few exceptions to this rule, so it's best to contact your lender directly for an answer.

The Benefits of a Car Title Loan

So, what makes a title loan such a popular option for so many Canadians? As we mentioned earlier, it's an ideal option for those who have poor credit or even very little credit history at all. That's because car title loans don't require credit checks. Instead, you'll just need to prove to the lender that you have some form of current income -- so they know you'll be able to pay back the loan. Self employed and those on benefits also qualify. You can provide them with a paystub from your employer or give them bank statements to show you have money coming in from an investment on a regular schedule or benefits. Another reason why car title loans are a wonderful option? Because you're able to get the money incredibly quickly. The application process itself (more on that in a moment) usually takes under an half hour. Additionally, if your car or truck isn't currently in your name, you'll still be eligible for a loan as long as the person who the car is registered to co-signs your loan alongside you. You can even be approved for a title loan on a company car as long as you can provide proof of ownership of the company. The usual way to prove ownership of a company is to provide a copy of the articles of incorporation Even better? Those who are undischarged from bankruptcy or who are currently in a Consumers Proposal are often approved for the loan.

Car Title Loans: The Requirements and Application Process

As we mentioned earlier, applying for car title loans in Toronto, the GTA and Ontario is a surprisingly fast and easy process. In fact, you are often able to do it online through an eLoan. First, you'll need to provide a copy of your driver's license and two accepted forms of identification. Acceptable forms of ID include your birth certificate, permanent resident card, passport, SIN card, health card, or other government-issued IDs. You will also need to provide proof of ownership of your vehicle and proof of insurance. You may also need to provide a pay sub or bank statement. Don't worry if you are self employed, a pay stub will not be required in those cases. Additionally, you'll need to provide a utility bill as proof of current residence as well as a void cheque or a pre-authorized payment form. Perhaps the most important thing is to take several pictures of your vehicle -- eight in total. You'll need to show the vehicle from the front, left, right, back, (with visible license plate) odometer, front and back interiors, and the door VIN. Keep in mind that the car needs to be nine years old or newer and that it must have less than 200,000 KMs on it. However, there are sometimes exceptions to this rule so again, get in touch directly with a lender. In many cases, you'll be able to get approved for your loan on the same day you submitted your application -- sometimes in as little as half an hour.

Apply for a Car Title Loan with Us

Now that you know more about the ins and outs of applying for a title loan in Canada, we invite you to apply with us online for yours today. Why go with Fast Action Finance? Because we're not like other lenders -- our goal is to approve every loan we possibly can, and to work with you to build a stronger financial future. We've been in business since 1997, so you can be assured that we have the experience to help you get exactly what you need. Additionally, we offer other lending options aside from car title loans. We can also assist you with collateral loans, repair loans, and motorcycle storage loans. Don't let your financial situation ruin your peace of mind for a moment longer. Instead, begin your application with us for a title loan by clicking here.
applying for a car title loan

What to Bring When Applying for a Car Title Loan

Are you ready to apply for a car title loan? You need the right paperwork to get approved the same day. Don't worry. You don't need to run to the courthouse or the bank. Most of what you need is likely sitting in your filing cabinet already. Here's what you need to bring when applying for a car title loan.

Three Types of Documents You Need to Apply for a Car Title Loan

Car title loans don't require any underwriting or credit checks. Instead, you borrow based on the value of the vehicle and your ability to pay it back. To that end, you need to bring documents that fall under three categories:
  • Proof of identity
  • Proof of vehicle ownership
  • Proof of residence
As proof of identity, you need to bring your driver's license as well as two pieces of further identification, including:
  • SIN card
  • Passport
  • Permanent resident card
  • Birth certificate
  • Health card
  • Firearms acquisition card
  • Other government-issued ID
Your names should match on all IDs, and they should all be current. Proof of ID is essential because you can only borrow against a car you own. The lender needs to ensure that you are the full owner of the vehicle. As proof of vehicle ownership, you need to bring both your vehicle and your original ownership papers and proof of insurance. These papers guarantee that the car is in your name. If the car has a second current owner, then that person also needs to sign-off on the loan. You should also bring in further documentation demonstrating proof of address. A recent utility bill works. Be sure that it shows the address and a current date. Additionally, you need to bring your pay stub, if you get one. One or two current paystubs works just fine. Although you don't need good credit or a full-time job, the lender wants to be confident that you are comfortable paying back the balance of the loan over the loan period. If you are self employed and do not get regular paystubs, this is not a problem. In this case be prepared to show what you do for income.

What Other Items Might I Need?

You may also need to bring a spare key if you have one for the vehicle and a void cheque. If you don't have cheques anymore, then you will fill out a pre-authorized payment form. Pre-authorized payment forms are very easy to obtain. You can get them from any branch of your bank and in most cases get them online if you use online banking. Do you want to apply online? Instead of bringing the vehicle in physically, you can send eight high-quality pictures of the car, including:
  • Left and right side
  • Front and back (including license plate)
  • Odometer (not trip meter)
  • Front and back interior
  • Door VIN
These pictures can be taken with any smartphone and emailed. In addition, the other documentation needed and described above can also be sent in by taking clear pictures with your smartphone. Finally, if the vehicle isn't in your name only (meaning there is another name on the registration other than yours), then you need to provide written permission from the other owner. If they don't give you permission, then they need to sign on as a co-signer on the loan. To get permission from the other person, the lender will provide you guidance.

What if It's a Company Vehicle?

You can borrow on a company car, but only if you own the company. You cannot borrow on a company car provided to you by another employer. If you intend to use your company's vehicle as collateral, you need to provide extra documentation proving that you own the company. You will need to show your articles of incorporation. In this case, your name must be listed as a director on the articles of incorporation.

Do I Need a Credit Check?

Your credit doesn't matter. Although you provide your ID, you can still borrow whether your credit is ruined or a work in progress. You can even get a title loan if you are in an undischarged bankruptcy or a Consumers Proposal as long as your vehicle qualifies for the loan. If you apply during bankruptcy or Consumers Proposal, you may need to provide additional documents to prove that your vehicle qualifies.

What If I Have a Lien on the Vehicle?

If you have a lien on the title, then you typically do not qualify for a car title loan. In some cases the lender can pay off the current loan on the vehicle and provide you with extra funds. The lender can see if there is a lien in place when you submit your documents. In some cases, you can apply for another product like a repair loan. However, you need to discuss your case with the lender directly.

How Much Can I Borrow?

You can borrow up to 50 percent of your Black Book value. The maximum loan amount tends to sit at $25,000. The lender offers you the maximum amount you can borrow, but you are under no obligation to take the full amount. If you are borrowing to pay a bill, you may find it simpler to borrow only as much as you need the first time around. If you need to borrow for a repair on your vehicle, you can do this in a separate product. Additionally, you don't need to own the car to apply for it; leased and financed cars also qualify for repair loans. Also, if you own a movable piece of equipment that can be left with the lender you can borrow this way.

How Quickly Can I Receive My Loan?

As long as you bring all the necessary documents with you, you can receive the funds on the same day you apply. If you apply online, you will get a response during business hours. You will either hear from the lender by email or by phone, so double-check that all your details are correct before submitting your application.

Questions About Applying for a Car Title Loan?

Applying for a car title loan is easy. Unlike applying for traditional financing, you don't need to provide stacks of bank statements or paystubs. All you need is proof of ID, proof of ownership, and proof of residence. If you are facing exceptional circumstances and can't provide one of these documents, don't panic. You can talk to the lender in person to learn more about your next steps. Are you ready to apply for a car title loan? Click here to learn more about how to get such a loan from Fast Action Finance on the same day you apply.
ways to borrow money

Ways to Borrow Money in Canada (Even if You Have Poor Credit)

When it comes to money, everyone could use a little help sometimes. After all, there are moments when funds run low, and there's just not enough cash on hand to make ends meet. During times like this, some people look for options that can provide the money needed to make it through until payday. Fortunately, there are a variety of ways to borrow money. This article takes a look at how to get quick cash in Canada when you need it most. Keep reading to see your best options.

Borrowing from Family or Friends

When it comes to borrowing money fast, the quickest and least complicated method is simply getting a short-term loan from a loved one. After all, there's no paperwork involved, they won't be running a credit check, and you won't have to worry about your application being processed by a maze of corporate administrators. Keep in mind that borrowing from family or friends can be awkward. Money can create tension in even the best of relationships. It's typically not fun being indebted to those who know you best. But if you're needing some help and they have the resources to float you a loan, this might be the ideal situation.

Credit Cards

Credit cards serve a useful purpose. They provide purchasing power without having to haul around bags of cash. You can buy almost anything and simply run your little piece of plastic through the card reader. And yet this convenience comes at a price. You'll be charged interest if you don't make your minimum monthly payment on time or pay off your balance before the end of the billing period. Many people resist using credit for purchases except as an energy resource; this is probably wise. But credit cards can also serve as a useful resource when your bank account is strained. Thus, if you're just needing a way to put gas in the car and food on the table until payday swings around, your credit cards can make life much easier.

Cash Advance on Credit Cards

Aside from traditional purchasing power, credit cards also provide another convenience. Many allow you to take out all or some of your available credit as a cash advance. Taking out a cash advance on your credit cards is quick and easy. This is typically a simple matter of withdrawing funds at an ATM. This is helpful because you can make withdrawals at any hour of the day. Just be sure to keep in mind that taking a cash advance on your credit card will typically include a fee and interest charges. But when you need cash fast, your credit cards can bail you out of a tight spot.

Unsecured Loan

Another popular option for borrowing money is to apply for an unsecured loan. This type of loan means that you're borrowing money without offering collateral. While traditional loans require some form of collateral such as a home, car, or other assets the lender can use to guarantee repayment on the loan, unsecured loans do not involve collateral. Instead, a variety of other stipulations are typically involved in the agreement. So if you don't have any form of collateral to offer as a guarantee, this could be a good solution when you need a load as soon as possible.

A Line of Credit

Many banks and credit cards offer customers a line of credit. A revolving line of credit means that you're able to borrow against a set credit limit, and continue to borrow as needed as long as you make payments and stay within the limit. This can be extremely useful to anyone needing cash advances on a regular basis. The key is to pay back the amount borrowed as quickly as possible to avoid finance and interest charges, because these fees and interest charges will be applied to any outstanding amount at the end of each billing cycle. The beauty of a revolving line of credit is that it's always available when you need it.

Mortgage Your Home

Taking out a mortgage on your home is a bit more complicated than other options on this list, and includes the biggest risk to the borrower. When you mortgage your home, you're taking out a loan and using your home as collateral. This provides you with the opportunity to borrow the largest amount of cash, but you also risk losing your home if you don't make your repayment on time. Think long and hard about your need for money before mortgaging your home, especially if it's already paid off. After all, there are plenty of other options available for getting short-term loans without involving your home.

Home Equity Loan

Home equity loans are slightly different from mortgages. This type of loan allows you to borrow against the equity you've built up in your home. Thus, you can borrow up to the amount you've already paid down.

A Car Title Loan

Perhaps the easiest way to get a loan is using your car title as collateral. Car title loans are fast, provide the cash you need, and are far less complicated to process than a home mortgage, unsecured loan, or home equity loan. In fact, most title loans can be applied for online and are often approved within minutes.

Payday Loans

Another super-easy way to borrow money fast is with a payday loan. This method of borrowing money allows you to borrow against your upcoming paycheck. This is very popular with people who typically just need quick cash to cover their obligations for a week or so.

Common Ways to Borrow Money in Canada

Everyone needs money, especially when life throws you a curveball and you need to find ways to borrow money fast. This article shows you how easy it can be to find the funds you need, regardless of your situation. Click here to find out everything you need to know to get approved for a car title loan.
car title loans

Is It Worth It?: The Top Benefits of Car Title Loans

Is It Worth It?: The Top Benefits of Car Title Loans

 

Do you struggle to get a traditional personal loan from a bank? Maybe you made some mistakes with your credit. Perhaps, like an increasing number of people in Ontario, you work in the gig economy and don’t earn a regular wage.

The conventional banking system isn’t a one-size-fits-all option that covers people in all circumstances. That’s why other types of credit continue to pop up: to serve those who the banks leave behind.

Auto title loans are one of those lending opportunities. With a car title loan, you borrow against the value of your car. Is an auto title loan worth it? Keep reading to find out if it could help you get cash fast.

What Are the Benefits of an Auto Title Loan?

Auto title loans(or car title loans) offer a chance to get cash quickly. Unlike other forms of credit, they don’t require long applications or underwriting. An application takes ten minutes, and lenders provide the cash on the same day (or next day).

A second benefit of the auto title loan is that it allows you to work with what you have today rather than what you aspire to have later. Building credit is a long process, but owning a car is much easier. Whether you own a car, truck, SUV, or even a motorcycle, you can borrow by using your vehicle’s title. The title (along with proof of income) is all you need. No aspirational credit scores are required.

There’s no credit check involved at all. You can borrow against the following vehicles as long as you own them free and clear:

  • Cars
  • Trucks
  • SUVs
  • Snowmobiles
  • RVs
  • Motorcycles

Car title loans are also more forgiving than a cash advance. Because the loan provider has a car as collateral, there’s less risk, which means interest rates and fees are often lower. The repayment options are also made apparent upfront, so you always know what you need to pay and when.

An auto title loan might sound too good to be true, but it gets better. While you do have to pledge your vehicle as collateral until you pay the loan back, you keep your car for the loan period. You can go where you want when you want.

Ultimately, what makes a car title loan worth is stress relief. You can get cash quickly without worrying about the fees and interest rates that trap people in debt with payday loans. Borrow what you need, pay it back (plus interest), and call it done - all without damage to your credit.

Make It Worth It: Enter an Auto Title Loan with Your Eyes Open

There are real benefits to an auto title loan compared to payday loans, cash advances, and even traditional lending.

However, as with any form of borrowing, auto title loans work best when you are aware of the terms and expectations.

Most auto title loans are for small amounts of money, which you borrow over one year, (maybe for longer or shorter periods too). In the end the total cost to you for an auto title loan is much less than what you would experience under other types of loan arrangements.

To make the most of the loan, it is important to only borrow as much as you can afford to payback within the term of the loan. That means avoiding borrowing excessive amounts.

When you borrow too much, you increase the likelihood that you might need an extension. Extending auto title loans is always possible, but why not avoid doing this? As your debt grows, you become less likely to be able to pay it back. It can spiral out of control and cause unnecessary worries.

How to Make Sure You’re Ready for a Car Title Loan

Is a car title loan right for you? The answer to that question lies not only in your finances but also in your ability to hunt down the right loan.

Before you sign the dotted line, you always need to talk to the title loan lender to feel them out and assure yourself that they are the right people to deal with, that they will understand your position should you run into problems, and be willing to help you out more further down the road.

You should know every detail before you jump into it headfirst.

Additionally, work with lenders who work within the traditional title loan parameters: short-term loans with reasonable repayment terms.

Don’t fall for the low monthly payment promise; you may pay a low sum every month, but in the end, you pay back exponentially more than you borrow. Typically you should be able to borrow about50 percentof your vehicle's Black Book value.

Finally, consider adding a co-signer to your loan. Your co-signer improves your likelihood of approval if your assets are minimal, and they are also one more layer between you and the lender in case something goes wrong. Make sure your co-signer knows the terms exactly and understands that they must also own a vehicle that meets lending criteria.

How Will a Title Loan Help You?

A car title loan can help you out of a tough spot without the interest rates of a payday lender or the strict requirements of a conventional bank. When you use a car title loan, it is important to understand that you get out of it what you put into it. Borrowing sensibly and learning the payment terms before you apply can prevent your debt from becoming unmanageable.

Do you need some extra cash but don't qualify for credit elsewhere? We can help. Click hereto learn about our eLoan process and learn how you can get up to $25,000 on the value of your car today. With the eLoan, there is no need to drive to the lender’s physical office, but rather can apply for the loan and receive it from an offsite location.