Quick Facts You Should Know About Salvage Car Title Loans
If your car has a salvage title, it might be a bit difficult to get a title loan because the requirements tend to be more stringent than getting a loan with a clean title. However, it doesn’t mean that getting a loan is impossible. Just like lending companies that provide title loans to customers with bad credit, some lenders will work with people who have title issues. As a guide, here are quick facts that you need to know about salvage car title loans.
- Expect to get Half the Value of a Clean Car Title Loan
Most lending firms will never give you a full amount of your vehicle’s worth as a loan. This is because such a move can put them at risk of losing a lot of money if you default. Many lenders offer between 30% and 50% of the value of your car.
With a salvaged car, expect to get even a lower rate or amount. A vehicle with a salvage title attached to it simply means that it was declared as a complete loss by an insurance company at some point. The vehicle may be in great shape now, but because it was wrecked at some point, there are chances that it suffered some underlying damages. As a result, lenders consider such vehicles as wild cards. And this is why they are valued slightly below cars with standard titles. So, before you opt for a salvage car title loan, establish whether half the amount of a typical loan on your type of car title will cater to your financial needs.
- Be Ready to Pay High-Interest Rates
Besides getting a lower loan amount, be ready to potentially pay a higher interest rate for a salvage car title loan. Salvage vehicle loans are considered to be risky investments for everyone, so you can be sure that any lending company worth its weight will not be ready to encourage customers to take loans against salvage vehicles by offering low-interest rates.
- Proving That You Are A Low Risk-Borrower May Go A Long Way
When deciding whether to write a loan for you or not, the first thing that lenders are going to asses is your risk level. To improve your chances of getting fast approval, it is critical to bring everything that can prove that you are not a high-risk borrower. This may include a good credit rating, good mechanic’s statement, and even a clean driving record.
A statement from your insurance company indicating that they are ready to insure the car (if it was rebuilt) can also help you a great deal. If you have managed to convince an insurance carrier to write a policy for the car, then a lending company can also take a risk and write for you a loan against it. On the flip side, if you are unable to convince insurance carrier to write for you a policy, many lenders will be skeptical to get you a car title loan.
- Partner With the Right Lender
As a borrower, you should be ready to do due diligence to find the best lending company to work with when applying for a salvage car title loan. One of the most critical things to look out for are unscrupulous creditors who will write for you a loan and then start making funny adjustments to your interest rates or monthly payments like raising minimum payments when you least expect it. To be safe, don’t accept fast offers that are extended to you if you are seeking salvage car title loans.
Take your time to determine whether or not the lending firm is legitimate. Check their licensing information with your state and other regulatory bodies. Strive to work with lenders who ask for proof of insurance. A good lender would want all its bases covered before approving a loan, so this is a good sign of validity.
The Bottom line
Although you may not get the full amount of money your car is worth because you have a salvage car title, you can still get some cash that you need to sort out your financial problems. All you need is to have realistic expectations and do everything in your power to boost your chances of getting the loan approved. Hopefully, the tips listed in this post will come in handy. Besides, consider talking with a few car title loan firms to be up to date with their expectations as well as loan estimates.