Title loans can be a helpful source of quick cash for those in a financial bind, but they also come with risks that are important to understand before proceeding.
Financial struggles can be stressful, but making informed decisions as a borrower can help you get back on track.
What Are Title Loans?
Title loans are short-term, secured loans that allow borrowers to use their vehicles as collateral. They are a quick and convenient way to access cash when you need it most, as the approval process is typically fast and requires little documentation.
For those who may not have access to traditional forms of credit or who need money quickly, title loans can be a helpful option. For example, if you have an unexpected medical expense or a car repair that you can’t afford, a title loan may be a good solution to cover the cost and avoid financial stress. Similarly, title loans are an alternative option if you have a poor credit score and canโt get a traditional loan.
It’s important to note that title loans come with high-interest rates and fees, so it’s crucial to have a plan for repayment to avoid getting trapped in a cycle of debt.
How Many Title Loans Can You Get?
What if you get in a situation where you need more financial support? How many title loans can you get?
The way title loans work, you cannot get multiple loans on one vehicle.
When you take out a title loan, the lender places a lien on your vehicle. This claim means they have a legal right to the vehicle until the loan is paid back in full. If youโve sold a house or traded in a vehicle, you may have gone through the lien check process during the sale.
This lien is recorded on your car title, which indicates that the lender has a financial interest in the vehicle. Essentially, the lender becomes a partial owner of the car until the loan is paid off.
As thereโs already a claim on your car, you canโt take out another title loan against it. Additionally, youโll be unable to sell or trade in the vehicle until the loan is paid. If the loan isnโt paid, the lender can repossess your vehicle and take full ownership.
In some states, you can get multiple title loans as long as you have several vehicles. In addition to cars, some people take title loans against their recreational vehicles, like RVs or boats.
Itโs important to do your research and determine whatโs allowed in your state before pursuing a title loan (or loans).
Solution To Get Another Title Loan
If youโve already got a car title loan and need extra cash, a title loan buyout is an excellent option. You just need to find a lender who will pay the remaining balance on your current loan. This way, you will get a new loan deal which usually comes at a much better rate and lower payments.
If you can’t get more than one title loan, a title loan buyout may be a quick and simple solution to get the extra funds you need.
