Do Title Loans Affect Credit Ratings?

Are you looking for affordable title loans these days? Well, there are many title loans providers you can rely on both locally and online. Yes, you get it right! Title loans are easy to apply nowadays. You just have to search for a credible title loans company, ready your car’s title and comply all their loan requirements. From there, you will surely have a good start when applying for a title loan. But, like other forms of investments, do title loans affect credit ratings? Then, let’s check these out!

Do title loans effect credit scores


What Is A Title Loan?

A title loan is considered a short-term loan payable for a shorter period of time. If you are interested in applying, all you need to do is put your car up as collateral to secure the loan and get approved.

  • These title loans work in such a way that lenders would place a lien against the title of your vehicle until payment is made in full.
  • The loan amount you’ll get after your approval is based on the current value of your vehicle at the moment you apply for it.

So, the process is just simple. You offer your car title as a guarantee, and you’ll have your money once approved. Sounds good, right?

What Are The Requirements Needed To Apply For A Title Loan?

When you are submitting a loan application, you can notice that there are many loan requirements to fulfill. These things may appear burdensome especially when you don’t have these ready ahead of time. But, with title loans, such requirements are considered immaterial.

  • This is so interesting as you just have to prepare the necessary requirements such as identification cards, proof of source of income, your residence address, contact information and of course, your car title.
  • If these documents are already well-prepared, then, you are good to go to receive your title loan as fast as you can least expect. Well, you can even choose the kind of vehicles you want to use to get a title loan as quickly as possible.

What Are The Effects Of Getting A Title Loan To Your Credit Ratings?

This is the most crucial part when dealing with loan applications. If you apply for a loan, the first thing that comes to mind is your credit ratings. Questions like, “How would my loan affect my credit score?” or “If I am unable to pay my loan, do title loans have a negative impact on my credit score?” Well, these are just two of so many questions you’ll most likely ask when you apply for a loan. But, here’s the catch now: Title loans are regarded as secured loans.

  • For that reason alone, you’ll be assured that you can pay your loan no matter what. When worst cases happen as you will be in default in paying your monthly amortizations, then, bear the consequence of having your car forfeited in favor of the lender in exchange for your title loan.

From there, you will be left with no choice but to say goodbye to your car. This would be the worst nightmare for you.

  1. The Effect of High-Interest Rates For Title Loans: For title loans to apply, it is compulsory for you to own a car as it will be used to guarantee your payment once default may happen. This process sounds easy, right? But, you may be missing the point here. After taking out your title loan, you’ll have an instant money, and everything about it feels good.
  • You are most likely unaware that the problem may start three to six months after making your monthly repayments. As they are short-term loans, they also carry high-interest rates when availed.
  • Because of that and those unforeseen circumstances, you’ll be possibly unable to pay your loan as expected from you monthly. If this case happens to you, then, you’ll start thinking about your credit standing.
  1. The Impact of Car Title Loans to Credit Ratings: Well, a credit standing is essential to a better and healthy financial life. In fact, thirty-five percent of your credit score is about your payment history. Such thirty-five percent is your so-called credit utilization. You’ll be wondering how the payment history impacts your credit score.

The answer is also easy. The higher your credit utilization is, the smaller your credit score is. Not only that, getting a loan may have a significant effect on your credit score percentage. This is mainly making sense as secured loans like car title loans may also have the potential of positively or negatively affecting your credit score. Nevertheless, an effect to your credit score is not always true with title loans. Yes, you get it right!

  • Unlike other types of loans, title loans work differently in some financial aspects. When you avail yourself of a title loan, you are not also leaving your credit ratings a lasting effect. Do you want to know how? Then, let’s take a look at these.
  • The process of applying a title loan is not the same with other personal loans. While some personal loans require thorough credit checks, title loans do not need these credit inquiries at all. It is because your credit ratings do not really matter since you borrow money and hand over your car’s title as collateral.
  • Here, you are using your car as your line of credit. As a result, your loan amount is not put as debt in your credit score because whether you fail in your payments or not; the lender has nothing to lose at all.

Usually, when you have a good payment history, your credit score raises to a reasonable value. A car title loan when paid has nothing much to contribute to your credit standing. There may be a little but not that much.

  1. The Possibility of Losing Your Asset: If you have plans to get a title loan, then, you have nothing to worry about your credit score. However, here comes now the potential risk.
  • Although such loans do not have substantial detrimental effects on your ratings, the possibility of losing your car in default is also apparent. That is why you are still required to take necessary precautions when applying for car title loans. Do not wait for the time when you’ll be out of control with your finances.
  • Take time to plan well your financial goals and ensure on-time payment as much as possible. By doing so, you’ll get rid of the likelihood of having your car sacrificed due to your negligence.


If you are sure of availing yourself of a title loan, consider the credibility of your loan provider. After all, it is your financial health that would benefit or suffer from your decisions. Hence, make financial choices wisely.

How to Get a Title Loan With No Job or Income

Were you recently laid off by your employer and haven’t yet found a new position? Or have you been searching for months and the unemployment benefits have stopped? Either way, you may find yourself in a financial bind and in need of fast cash.

If you’ve tried to seek funding from brick and mortar banks and credit unions, they probably denied your application.

Fortunately, you may be able to qualify for an auto title loan without a job or source of income.

Title Loan With No Job or Income

No job or income? No problem. You can still get approved for a title loan through some lenders. To get started with the application process, you’ll need:

  • The original title to your vehicle. It must be free of any liens or you will not qualify for a loan. The title will serve as collateral for the loan. And if you are unable to pay it off, the lender will be able to cut their losses.
  • Government-issued photo identification. Regardless of the lender, you will need to provide a valid form of photo id to establish your identity.

The next step is completing the application and submitting it to the lender for review.

But before they can issue a loan decision, the lender will need to appraise your vehicle to determine how much it’s worth. This is also the figure the lender will use to decide how much they’re willing to lend you. (Remember: the lender won’t have concrete proof of your cash on hand, so this is an integral step in the loan review process).

Upon approval, you’ll be on your way with the cash you need to cover those unexpected expenses or financial emergencies.

How No Job or Income Title Loans Differ From Personal Loans

There are several key differences between personal loans and no job or income title loans you should keep in mind when researching your options:

  • No credit check: Because no job or income title loans are secured by your vehicle, the lender is not concerned with creditworthiness. If you’re a credit risk, their losses will be limited by repossessing and selling your vehicle. But traditional lenders have no choice but to rely on your creditworthiness. This helps determine if you’re a good risk and the likelihood you’ll default on the loan.
  • No income verification: Most traditional lenders also analyze your income to determine if you can afford to repay the loan. But income is irrelevant to this type of title loan as the lender is only concerned with the collateral.
  • Cosigner not required: In most instances, traditional lenders will require you to have a cosigner to guarantee the loan before approving your application. “Having a co-signer on your loan gives your lender additional assurance that the loan will be repaid,” notes the Consumer Financial Protection Bureau (CFPB). But with a no job or income title loan, a cosigner isn’t required.
  • Higher interest rates: Unfortunately, no job or income title loans come with higher interest rates. According to, the rates can go well into three-digits. Reasoning: these loans cater to the subprime market and are more risky for lenders than unsecured loans offered by traditional lenders to those who are good credit risks.

How Long Does It Take to Apply for a No Job or Income Title Loan?

Loan application review times vary by lender. But it shouldn’t take more than a few hours to get approved and have immediate access to the cash you need.

How Much Can You Get for a No Job or Income Title Loan?

It varies by the lender as each has their own loan minimums and limits. “On average, these loans are for $100 to $5,500. But they can be for $10,000 or more from some lenders,” notes

How Long Does It Take to Pay Off a No Job or Income Title Loan?

The repayment period depends on the amount of the loan. In most instances, it will span between 15 and 30 days. But some lenders will give you six months or more to make payments if the loan is for a larger amount.

Are No Job or Income Title Loans Good or Bad?

There has been much debate regarding if no job or income title loans are a worthwhile option to retrieve cash. As with most no credit check loans, interest rates are exorbitant.

This makes payments much higher and could end up costing you a fortune over time. Even worse, your finances can take a tumble if you’re forced to keep rolling the loan over month after month. (Rollovers equate to more interest and fees).

So, be sure to read the fine print before applying so you’ll understand exactly what you’re getting yourself into.

Most importantly, doing your homework could help you dodge a bullet and search for better options elsewhere. Plus, you won’t have to worry about getting your car repossessed if you default on the loan.


What Happens when you Default on an Auto Title Loan?

When you have your finances on the low, auto title loans are usually the primary recourse of many. Why is that so? Well, this is primarily because auto title loans are regarded as short-term secured loans which approval would only take a couple of minutes. Yes, you get it right!

These loans have higher approval rates because all you have to do is put your car as collateral and in case you fail to pay, you’ll need to surrender your vehicle to your lender. These are the typical situations when you’re dealing with auto title loans applications. However, what is risky here is when you default on your auto title loan. So, what really happens when you fail to pay your credit? Let’s check these out:

damaging effect of defaulting on an auto title loan

Repossession of Your Car

Applying for a title loan may appear very easy and beneficial for emergency cases. However, you may be wrong all along. In dealing with auto title loans, high-interest rates are also coming your way.

  • Due to its simplified application process, lenders would approve your loan if you have a valid title in your hands. It is tempting, right? You get an instant cash as soon as you give your asset as security.
  • However, title loans do not always work like this. For some reasons, the interest rates on top of your principal loan make you gamble everything. Meaning, times may come that your monthly income could no longer compensate your debts

So, if you are too drained that you could not be able to pay your monthly payments for your auto title loan, chances are you’ll voluntarily hand over your car to your lender. When this happens, you just have to let go of your asset in exchange for your failure to remit monthly repayments.

  • Yes, it is a financial disaster that you would not suppose to encounter if you just take necessary precautions from the beginning. If the repossession of your vehicle comes, you just have to give in freely as you are bound to the terms and conditions outlined in your loan agreement.
  • What is required from you when you are already in default of your title loan is the compulsory surrender of your asset. From there, you don’t need to make payments anymore as your loan balances will now be closed.

Other Legal Actions

If you owe a lending company with title loans and you fail to make scheduled payments, then, you still have nothing serious to worry about. Once you yield your car to your lender as part of the agreement, everything will follow smoothly except the unfortunate fact that you would permanently lose one of your assets. Such loss may be so heartbreaking, right? You have nothing to do but accept it.

Due to default, you would not only be able to save your car, but you would as well get bad credits. In these distressing times, here are two of the most asked questions regarding a default on title loans:

Can You Be Imprisoned When You Default On An Auto Title Loan?

You may be asking about whether you’ll go to jail because of the non-payment of your title loans. Well, the answer is of course no.

  • For some, putting you in jail may be the worst case scenario that a lender may do especially when you show non-performance of the terms and conditions of your loan contract. It may be happening in other places but, as laid down by law, no lender can threaten you about it. Perhaps, are you even afraid of getting arrested for default? Then, you should not.
  • An arrest cannot be considered as a legal remedy for lending companies to enforce compliance with the auto title loan contracts. You could not also be subjected to harassment when facing this kind of financial dilemma. For instance, threatening you of going to prison is a violation of your rights under Fair Debt Collection Practices Act. So, know your legal rights, and you’ll surely be protected.

Will Your Cars Be Taken By Force Or Physical Threats?

Well, the answer for this is no. Cars which are also taken by force, intimidation, coercion and other violent means are also prohibited. What the lender can legally do is to take away your car within a reasonable period of time. From there, notices are also given to remind you of your financial liabilities including the timeline of the repossession of your car.

Are Repossession Of Your Asset and Other Legal Measures Worth The Risk?

Losing your car is so devastating. But, given the consequence of having your asset forfeited, the critical question is if it is still worth all your effort and time. In this case, it is not at all. You can use these auto title loans to your advantage when you are sure and confident that you can repay back your credit.

  • However, if you only earn a sufficient amount of income, then, you’ll find these loans disadvantageous at all. Not only that, your credit profile would likely suffer if you’ll go on with these without knowing the potential risks that title loans may cause your financial life.

What Are The Things To Do To Prevent Auto Title Loan Default?

When your auto title loans start to stress you up, give yourself some space to breathe and relax for a while. If you already have a title loan on your shoulder, you just need to be mindful of the steps you’ll be taking to avoid auto title loan default.

    • First, plan your monthly finances well and make sure to allocate payment of your title loan every month. Every postponement you make affects your credit line.
    • Second, do not miss any scheduled payments even only once so that you’ll not incur a hard time recuperating from the loss.
    • Third, look for other helpful options to pay off title loans as fast as you can. It may be through debt consolidation or refinancing. Besides, what should be presented here is the accumulation of penalties on top of your interests when you delay your payments. Having these things done may guarantee your car’s safety from being repossessed by the lender.

So, if you are planning to take advantage of auto title loan as a financial way out, you better rethink your plan. Being so fascinated with how title loan applications work conveniently for you does not mean that you have to do so even though you lack financial resources. What you can do is exhaust all other means first and resort to it only when there’s no other way.

How To Save Money With An Online Title Loan

When getting an online title loan, people usually have these negative comments. Yes, that’s true. Undesirable views about falling back with an online title loan are typically around the Internet. Several car equity lenders are in fact all over the news because of these negative opinions of people regarding title loans. Issues like paying high-interest rates to repossession of assets are known to be the common reasons why borrowers are unsuccessful with their monthly repayments. But, why do people resort to getting a title loan in the first place? Well, here’s why.

Online Title Loans: An overview

For some other reasons, online title loans can also be best when emergency cases arise. Yes, you heard it right. Borrowers can usually save money when they avail themselves of such loans than just do nothing.

  • In cases like these, you’ll not think of the possible consequences if you fail to pay monthly when you have an emergency financial situation to address. You’ll try all available solutions you can get just to get rid of your financial difficulty as quickly as possible.
  • This is making a lot of sense especially when others options are no longer available for you. It can happen when you get disapproved for a bank loan due to a bad credit rating or your family and friends refuse to lend you money.

These options do not just work out that easily. How can you avail of these financial solutions when you have a low credit score?

That is why you can see the difference between not having cash at all and the alternative of asking help from car equity lenders. In this situation, you can have the preference of taking out a loan and paying it back on a monthly basis. Despite title loan’s fallbacks, here’s how to save money with it in the long run:

  1. Work In A Company That Funds Online Title Loans –

One way of saving money, in the long run, is by working in a company that funds title loans. Yes, you get it right. When you are not qualified for other financing solutions because of your low credit report, you are left with no choice but to take advantage of title loans.

  • An example of this is when you’re having repair problems in your house. Each day that passes by is also costing you a lot of money. Even though you’ll pay high financial charges and face the probability of losing your vehicle, you’ll still deal with it to get quick cash. This is how it works when you are really empty-handed. But, what’s important here is you still need to pay the lender back afterward.
  • On the bright side, you can manage your loan and save eventually when you get to work in a company that supports online title loans. Here, institutions like these do not ask for pre-payment charges. When you already receive the cash, your interest begins running, making it difficult for you to make on-time payments each month. It’s like getting more expensive as days go by.
  1. Early Payment Scheme By Car Title Loans

Although interests rates and payment schedules set by online title loans companies change over time, the fact remains that you have to pay your loan back to avoid repossession of your asset.

While several types of loans require various payment terms, short-term secured loans like online title loans will have a higher average percentage rate compared to other financial options. When you apply for it, it’s like you’re just getting cash advances.

  • What you need to understand here is you pay it off in the shortest amount of time. By doing so, you’ll avoid the continuous growth of huge finance charges over time. Unlike those traditional lending options, an online title loan does not need years before final payment can be settled.
  • This is the reason why you can’t see title loans as similar to those other personal loans. Not just that, circumstances like having a poor credit rating make it hard for you to apply for bank loans. From there, you’re going to consider online title loans as your last financial recourse.

Advantages of Online Title Loans

Nowadays, title loans are viewed by many in the negative light. However, there are still borrowers who believe that online title loans save them from a distressing financial hardship. For that reason alone, it’s safe to say that these short-term secured loans may still have something good to do with your monetary burdens.

If you’re applying for an online title loan, here are some of its advantages that may help you along the way:

  1. The Application Can Be Done Online – Now, it’s easy to get away with financial mishaps using title loans. That’s true. Applications for such loans can be conveniently made online. You just need a mobile phone or computer to get it done. There’s no need to visit a physical branch to complete the application process.
  1. Easy Qualification Requirements – You never have to worry about any loan requirements. With title loans, no credit inquiries are required. You just have to submit your car’s clean title, and you’re good to go. Just make sure you’ll not have default payments so that repossession of your car can never be compulsory.
  1. The Same-Day Approval On The Same Day You Apply For A Loan – There’s no more waiting for this type of loan. If you need money urgently, you’ll surely be accommodated with this online title loan. Just prepare your vehicle’s documents. On top of this, loans are processed as fast as possible. Just wait for few minutes or less, and get your cash loan right away.
  1. Higher or Shorter Loan Amounts – With title loans, you can borrow any amount that you require. Your car’s current value determines the amount of cash you can get. The higher value your car has, the larger amount of money you can take out.
  1. Loan Cash Can Be Deposited In Your Bank Account – There are some car equity lenders who’ll make things easier for you. The hassle-free release of cash loan can be done through direct deposits. This process ensures that you can meet any emergency financial need.


When you’re dealing with any stressful financial situation, exhaust all options first. If you have cleared your mind about using online title loans, it’s essential that you are familiar with how these loans can positively or negatively affect you. Spend time to understand the advantages and consequences of these title loans. But, if you know how to manage your loan, at the end of the day, you’ll surely have a successful credit experience.