The Documents That You Need During A Vehicle Title Loan ApplicationFast Action Finance
The title loan to a car is also referred to as a vehicle loan, auto title loan, pink slip loan, or even simply a title loan. It is a secured type of loan where the borrower makes use of his/her car as collateral. Borrowers must allow the lending company to place partial ownership on their vehicle. They temporarily surrender their vehicle’s hard copy title, and are given cash in return. Once the cash is repaid, ownership is reverted to the borrower. But if the borrower does not do the payments on time, the lending company is at liberty to keep the lien on the vehicle, and can as well resell it so as to take care of the outstanding balance borrowed.
Title loans allow a borrower to bridge gaps in their incomes by putting their vehicles up as collateral in exchange for a loan. The lending companies often utilize the equity in the paid-off car to ascertain the loan size. Unlike the collateral loans by pawn shops, car title loans allow the borrower to keep their property, even as they pay off what they owe. In case of a default, the lending company can seize the car and sell it in order to recoup the funds attributable to the loan. For a car title loan, only the vehicle’s owner can use their vehicle as collateral. The documents that are required while picking up the car title loan include:
The most basic requirements for car title loans are that the borrowers must own their vehicle. It must have been paid off, without any current liens. You need to provide the car title loan lender with your social security number and driver’s license for purposes of verifying your identity. If in case you own a vehicle but have not been licensed by the authorities to drive, the lending company can accept a valid state issued ID card, passport or military identification. You can then fill out a loan application form providing information about the vehicles year, make, model, style and mileage. This information allows the lending company to provide you with free pre-approved loan quote.
Car title loans are not facilitated in all states. Therefore, you need to provide prove that you reside in a location that allows them. The residency documents also go a long way in verifying your identity. The lending company needs to see recent phone bill or utility, together with the houses deed or lease. A statement from the landlord also provides prove of residency.
Besides providing the vehicles as collateral for the loan you are expected to provide prove that you are indeed in a position to submit the monthly payments. Car title loan companies may ask for 1 to 4 weeks of payment stubs from the wage earners. The self-employed borrowers are expected to provide 1 to 3 years of tax payment records, bank statements and business financial documents. Unemployed persons who rely on social security or on public assistance must provide statements derived from the department of Social Security Administration or the social services. Retired borrowers can furnish pension statements, retirement account statements or SSA statements.
Provide the car’s title and registration as a way of proving you rightfully own the vehicle and that it has no current liens. Furthermore, car title loan lenders require proof of insurance. The insurance comes handy in providing protection against losses in the event that the vehicle is stolen or damaged. If in case the vehicle was under lien in the past but was recently released from the lien, you will be expected to provide the release paperwork derived from the previous lien holder.
The majority of car title loan lenders require borrowers to furnish them with at least 2 references, although some require 3 to 5 references. The lending companies claim that references do help them assess your character as well as your ability to repay the title loan. The loan companies often do not contact the references unless the borrowers default and are unable to contact them. Many of the lending companies ask for at least one professional and one personal reference. The information that is included includes the references names, their phone numbers and the relationship they have with the borrower.
The car title loans in Toronto are short term in nature and tend to carry high interest rates compared with other sources of financial credit. The lending company typically does not check the borrowers’ credit history and only considers the condition and value of the vehicle. When you visit one of the title loan companies to pick your cash, you are expected to bring along the above items, including title to your car and spare set of car keys. The company holds onto these even as you continue to submit your monthly payments. This means you will continue to have the vehicle in your possession and even continue driving it. Once the loan is paid off, the title loan company returns these items to the borrower.