How 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, such as a car, motorcycle, commercial truck, or SUV. You can keep driving your vehicle for the duration of the loan, and your lender is listed as the primary lienholder on the vehicle's pink slip.

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

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 issue for anyone who needs fast cash to pay for a financial crisis. Your lending options are severely limited when you have poor credit, and most personal loan lenders will deny your application if you have a credit score of 700 or less.  Auto equity lenders, on the other hand, aren't focused on your credit history; instead, they look at your vehicle's value and ability to repay the loan when underwriting your loan terms.

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 car, 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 the keys to your car. You don't need to give up daily use of your vehicle; instead, you guarantee your loan with the vehicle's title.

 

Drawbacks Of Vehicle Equity Loans

High Interest Rates (APR)—A drawback to getting a vehicle equity loan is the high interest rates, which make 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 that's still higher than bank loans that require good credit.

Repossession—You risk losing your car if you miss payments and default on the loan. If your vehicle is ever repossessed, you'll still have time to get it back but still owe late and repossession fees. 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 way to borrow money without focusing on your credit history, consider an online equity loan with California Title Loans. Apply online, or call us at 855-339-1001 to get a jumpstart on your title loan application over the phone. Loan amounts with an auto equity loan in California start at $2,500, and customers with a paid off vehicle can borrow up to 65% of the resale amount. Apply today!