Let us begin with the basics. What is a title loan?
When a person needs money, he needs to borrow it from some source. This is a system where a person can borrow from a lender and in lieu of money, the documents of the vehicle including the title are kept with the lender. This kind of loan is normally for a short term but at a higher rate of interest. The lender keeps a lien on the car. The borrower can continue to use the vehicle and repay the loan amount based on the agreement. If he is unable to repay as per the agreement, then the lender can legally repossess the vehicle to recover his money.
It is a fairly simple process and takes very little time to execute. The basic documents needed for the process are as follows:
- A valid government-issued identity proof. The social security number and a valid id proof. This can be a passport, driving license, id card issued by any other authority like military or government agency.
- The Title loans are available in some states. So you need to show a proof that you are a resident of the state where you are looking for this loan. This can be a utility bill, registration papers or any relevant documents.
- Financial documents proving that you can repay the loan. It could be salary slips, tax record, bank statements etc. Unemployed or retired people can show other pertinent papers like a statement from social service or pension statements.
- Obviously the vehicle Title and registration papers of the vehicle. They need to ensure that car has no previous lien against it, is registered in your name and is insured against damage or loss.
Title loan companies also ask for some references. They want at least a personal and a professional reference. This reaffirms your credibility. These people are contacted only if the loan is not repaid or the borrower absconds.
So now you have all the required information. Check all the documents and then go to a trusted company.