Car Title Loan Requriements

A car title loan can be a good source for quick cash with minimum hassle for those who own a car outright. Having the documentation required can speed up an already-fast process so that you get your loan in the shortest time possible.

Car Title Loans Explained

All lending weighs the risk the lender faces in giving you money. The higher the risk, the higher the interest rate. Similarly, the higher the risk, the more stringent the requirements to qualify for the loan. Loans secured by valuable property lower risk so that a loan can be less expensive or easier to obtain or both.

With a car title loan, you can qualify quickly and easily because you are pledging your paid-for car as security. Be aware, car title loans are typically a last resort and are for those who might have trouble qualifying for a traditional bank or credit union loan because of poor credit history or not enough income. The effective interest rate, therefore, is high on a car title loan.

Know What You Want

Car title loan amounts range from as little as $100 to thousands of dollars. Many states set limits on how much you can borrow against your car, but you can likely borrow up to $4,000 in most states, more in others. Of course, regardless of state limits, you can borrow only an amount justified by the value of your vehicle.

A Vehicle You Own

Speaking of vehicle value, the first requirement for a car title loan is a car you own outright. You will be expected to surrender the title to the lender when you are approved for your loan. Remember, your vehicle is the security for the loan, so if you default, the lender will have the title and can take the car.

You will also need to provide a spare set of keys. Again, no one wants you to default on the loan. The lender does not want your car. Neither does the lender want to be forced to get a locksmith to get in your car if repossession is required.

And, of course, the lender will want to see and inspect your car, match your title to it and be assured of its condition and value.


Expect to show a valid driver's license when applying for a car title loan. You will also need to show proof of insurance. The larger your loan amount, the more comprehensive your coverage will need to be. As an example, one car title lender requires full coverage for loan amounts above $1,500. You should bring a current utility bill as well to verify your address. And, finally, bring a lease if you are renting your home or your title or loan documentation if buying a home.

Income Verification

Bring your previous two pay stubs when applying for a car title loan. If self-employed, bring your last two years' tax returns. Finally, references may not be required, but it makes a good impression to bring them.

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