Online Car Collateral Loans in California!

Car Collateral Loans - What You Need To Know

A car collateral loan works like this: you use your car (or any other vehicle with a certificate of title, such as motorcycles, trucks, or SUVs) as collateral for the loan. Loan amounts start at $2,500 in California, and you can repay your loan over 12 to 49 months. If you default on the loan terms, your lender may repossess the vehicle for non-payment.

Car collateral loans are secured by your car, truck, or SUV, which means higher loan amounts than you would get with unsecured personal loans, sometimes over $10,000. However, before applying with us, it's best to determine if using your car or truck as collateral is a good idea. Yes, you can borrow a lot with a collateral loan, and most lenders in California only perform a soft credit check, but you also risk getting into more debt or a possible repossession if you fall behind on payments.

A loan with your car as collateral differs from most traditional financing options. While conventional auto loans spread out your payments over 5 or more years with the vehicle as collateral from a purchase, a car collateral loan allows you to borrow against the vehicle with equity that you've already built up. That means car collateral loans are an option for many borrowers, including those with poor credit, because the vehicle itself serves as collateral. However, it also means you're using a paid off asset at risk of repossession if you fail to make payments on your loan. Borrowers typically turn to car collateral loans when traditional unsecured lenders have denied their applications or when they need cash within a few days for emergency expenses.

Requirements For A Collateral Loan On A Car

Title loan companies in California require that your car be paid off (i.e., there are no liens or loans against it) and that you provide a clean, clear car title. It must be registered in California with current tags, and you need proof of insurance.

The vehicle must be in good condition, and you may need a vehicle inspection before signing the contract. Your inspection can be completed on the day you apply, often at a nearby lending location.

The last requirement for a car collateral loan in California is that you can repay the loan. This typically means proof of income from your bank, employer, or Government records.

Interest Rates With Car Collateral Loans In California

Car collateral loans in California are subject to state-regulated interest rate limits. Under AB 539 lending laws, collateral loans between $2,500 and $9,999 are subject to a maximum annual percentage rate (APR) of 36% plus the federal funds rate, with a mandatory minimum repayment term of 12 months.

Collateral loans exceeding $10,000 fall outside of these caps, and there are no limits on the interest rate a lender can charge.

Lending laws in California also protect borrowers by prohibiting prepayment penalties on car collateral loans between $2,500 and $9,999.

Benefits Of Car Collateral Loans

One benefit of car collateral loans is that you can be approved much quicker than applying for a personal loan. Besides that, poor credit scores won't necessarily lead to you getting turned down. Many people apply for a collateral loan on their vehicle after being turned down by numerous banks and credit unions.

Car collateral title loans can offer higher loan amounts than bank loans and are typically processed quickly because there are fewer credit checks. Funding amounts for loans with a car or truck as collateral are based on the resale value of your vehicle.

Another benefit of a collateral loan on a car is that you can pay off your loan at your own pace. Yes, you'll receive an initial repayment term when your loan is approved, typically 12 to 48 months. However, there's no issue with paying off the loan early or sending more money each month to get out of debt quicker.

Loans with a car as collateral in California often range from $2,500 to $20,000, with the loan amount usually 40% to 60% of your vehicle's resale value.

Drawbacks To Consider With A Car Collateral Loan

Even with California's interest caps, you should expect a high interest rate with a car collateral loan. For loan amounts between $2,500 and $9,999, you can expect an APR that maxes out at 39.6%. Interest rates for these loans over $10,000 have no interest rate caps.

There's always the risk of losing your vehicle to a repossession. In California, missing a payment on your loan puts you in technical default, and you risk repossession.

You often can't come close to borrowing the full equity amount of your vehicle. Most licensed lenders in California that offer car collateral loans cap loan amounts at 60% of the vehicle's equity.

Refinance Your Vehicle Collateral Loan In California - Get A Quick Quote

Let's say you have a car collateral loan with high rates from another lender. In that scenario, refinancing your loan may offer significant benefits, and you may be able to get better payoff terms. This can save you money on interest charges and extend the payoff term with a monthly payment that better fits your budget. Get a quick quote to refinance your collateral loan online with California Title Loans, or call us at 855-339-1001.

Get Pre-Approved With A Car As Collateral For A Loan

Did you know it can take less than an hour to be pre-approved for a car collateral loan online with California Title Loans? Here's what we need: First, complete the online application with your personal information and vehicle details, or call us to complete the initial underwriting and get a quote over the phone. Next, provide the required documents, including the car's title, proof of income, and registration information. Lastly, visit a local lending location in California to finalize the paperwork, complete the inspection, and receive your funds. Feel free to apply for fast funding collateral loans using your car, motorcycle, or truck as collateral.

Call California Title Loans at 855-339-1001 anytime to get a quote for a collateral loan based on your vehicle's value. We'll process your application fast and notify you promptly of your pre-approval.