How Do Auto Equity Loans Work, And What's Required

Have you recently been turned down for a loan because of your poor credit? Very few lenders will offer more than $1,000 for a personal loan unless you have good credit or some collateral backing it up. An auto equity loan from California Title Loans is a great option not only to borrow a significant amount but also to ensure that your credit score won't be much of a factor when determining how much you can borrow.  Auto equity loans use a vehicle as collateral, which can be a car, motorcycle, or anything else that can be titled with the DMV. You can keep driving your vehicle for the life of the loan, and your title is transferred over to a lender as collateral.

Not all equity lenders are the same, and you should expect different requirements for most types of vehicles. For example, a car valued at $10,000 may lead to a title loan of $5,000 with an interest rate of 25%. On the other hand, a vehicle valued at $6,000 can get you a loan of $2,500, but you may need to bring the car in for inspection, and the interest rate may be higher.

The requirements for an auto equity loan are similar to those for title loans in CA and anyone who applies with a paid off vehicle has a good chance of qualifying. The car's title must be in your name and you can't have any lienholders on the car's title. Some more requirements include proof of income, showing you can afford the monthly payments. Prove your income with bank statements or a letter from your employer. While income verification and a paid off vehicle are the main requirements for a title loan in California, you may also need registration documents and proof of insurance coverage on the vehicle.

Some lenders require an in person inspection of your vehicle to confirm that it can be used as collateral for an equity loan. During the inspection, they'll check for cosmetic and mechanical defects, confirm that the vehicle has been smogged, and verify the VIN and mileage.


A car with considerable equity driving on the freeway.


Auto Equity Loans With Bad Credit - How To Get Approved

Bad credit can be a significant obstacle for those who need money quickly. However, car equity lenders throughout the US will work with people with poor credit and allow them to get approved for a loan based on the equity in their vehicle.

Did you know you can rebuild your credit score with an auto equity loan?  If you use it responsibly, a car equity loan with bad credit can help to increase your credit score. Some title loan companies in California report your payments to the credit bureaus, and you can see your credit score go up while making monthly payments on your vehicle equity loan!

California Title Loans offers access to auto equity loans for anyone with a lien free vehicle and your credit score is a minimal factor during the underwriting process! Lenders want to know that there's a vehicle they can fall back on if you default on the payments and that's far more important to them than your FICO score! Call California Title Loans at 855-339-1001 today to get started on your application to cash out equity from your car or truck!


Benefits Of Online Vehicle Equity Loans

Equity Loans Are Convenient - Borrowers applying for equity loans often need cash in 24 hours or less, and that's where California Title Loans can help you. All you need to qualify is a paid off vehicle and proof of income. Underwriting for an equity loan is minimal because we know there's equity in your vehicle, and that's the collateral for a title loan!

No Credit Check - Unlike unsecured loans that require multiple credit checks, most vehicle equity loans have minimal credit requirements. Your credit score is far down the list of requirements for an equity loan, and you should have no trouble getting approved, even with a few loan defaults or missed payments on your credit cards.

Keep Your Car - An equity loan on your vehicle allows you to keep driving your vehicle!  Unlike a title pawn, there's no requirement to hand over a vehicle to a title pawn company. Your car's pink slip is security for the loan, and you can keep the keys to your car!


Drawbacks Of Vehicle Equity Loans

High Interest Rates (APR) - A drawback to getting a vehicle equity loan is the high interest rates, making it difficult to pay back early. The APR for any type of secured loan between $2,500 and $10,000 in CA is limited to 36%, but still, that's higher than bank loans that require good credit.

Repossession - You risk losing your car if you miss payments and default on the loan. Once your vehicle is repossessed you'll still have some time to get your vehicle, but that's not a situation you want to be in. Stay updated on the repossession laws in California, and contact your lender if you can't make the minimum payments.


The Bottom Line About Auto Equity Loans

If you're looking for a fast and convenient financing option, consider the equity lending options at California Title Loans. Apply online, or call us at 855-339-1001 to get a jumpstart on your application over the phone. Loan amounts with an auto equity loan in CA start at $2,500, and most customers with a paid-off vehicle can borrow up to 70% of the resale amount. Apply today!