A title loan can be just the ticket when some quick cash is needed. All you essentially need is a vehicle with a lien-free title and proof of loan repayment ability. There are a few more eligibility provisions, which we cover below. So, if you’re a resident of the Lone Star State, here’s how title loans work in Texas.
Just What is a Title Loan?
It’s a short-term loan that’s secured by your vehicle, which you get to keep during the entire lending process – provided you’re making your loan payments. Lenders aren’t too worried about risk, since the vehicle – car, truck, RV, boat, or motorcycle – serves as collateral. Because the lender can seize your vehicle and sell it if the loan isn’t repaid, you must make sure you can do so.
While most banks will reject a loan applicant if their credit is subpar, that’s not the case with most title lenders. While your credit scores may be considered, they’re never the main focus.
What Do Lenders Care About?
In the main, lenders concern themselves with your vehicle’s value and whether you have the income for loan repayment. If you struggle to make your payments, some title companies will allow you to refinance your loan. The fact is that lenders aren’t in the car-selling business; they hope to avoid repossessing your vehicle.
How Can I Use My Loan?
There are no rules in this regard. Common reasons for taking out a title loan include home improvement, travel, a funeral or wedding, veterinarian bills, medical bills, debt consolidation, or some unexpected expense.
Can I Apply Online?
Many Texas lenders will allow you to complete the application process online or over the phone. This means the approval process is accelerated, and that you can expect an answer within a business day of applying.
Are There Any Requirements Specific to Texas?
It’s a good question, since title lenders are state regulated. So, yes, Texas requires applicants to:
- Have consistent employment income or income from a source such as a retirement program.
- Have a vehicle in their name.
- Be at least age 18.
What Documents are Necessary in Texas?
- Pay stubs or bank statements or the like to prove income, about which lenders can be flexible. Employment isn’t necessary if an alternate income source exists. In Texas, borrowers may present, for example, proof of worker’s compensation, disability benefits, self-employment, landlord or rental income, settlement income, or pension income.
- Proof that you reside in Texas.
- Recent, quality photos from all four angles of the vehicle you wish to collateralize. You’ll also need a photo of the vehicle’s odometer.
- A Texas-issued photo identification or other government-issued ID.
- A vehicle in your name that’s registered in Texas.
Again, what you won’t need as a Texas resident is good credit.
What Kinds of Vehicles are Preferable in Texas?
As part of the application process for title loans in Texas, you’ll need to provide the make, model, age, and mileage of your vehicle. Due to the state’s terrain, it’s likely no surprise that pickup trucks and other heavy-duty vehicles are very popular, and thus are frequently used as loan collateral. That’s not to say that other kinds of vehicles aren’t considered for a loan; they are. The vehicles’ overall condition and any modifications are factors, however.
As you can see, it’s always a good idea to take care of scratches and minor dents and to keep your vehicle’s interior clean. You just never know.
So, that’s basically how title loans work in Texas. Just make sure you pick a reputable, credible company and that you can repay the loan. After that, you should be all set.