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Can I get a title loan on a financed car?
My water heater broke recently and I’m in desperate need of some extra cash. I want to apply for a title loan, but my car is financed. It’s almost entirely paid off, but I still owe about $1,000. Can I get a title loan even if it’s still financed?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Having a household appliance breakdown is almost always stressful and expensive, so sorry to hear about that. In some cases, you can get a title loan on a car that is financed.
Before you decide to get a title loan, consider an auto refinancing. If you have decent credit, a debt-to-income ratio less than 43%, and income to support the loan, refinancing is far less expensive in terms of interest paid over the life of the loan.
Ask your current lender about refinancing or shop around to see what rates you can find. If that doesn’t work, a title loan may have to do.
The most challenging part of getting a title loan is finding a lender who will offer one on a financed vehicle. No legal restrictions prevent you from getting a title loan, but some lenders will only provide a loan if you own the vehicle outright.
Since you have positive equity in your vehicle, or your car is worth more than your loan balance, you’re well-positioned to get a title loan than if you were
upside down
on the loan.After finding a title loan lender, you will have to provide the following:
- A completed loan application
- Your vehicle’s title
- Your driver’s license
- Financial documents for your car, including the remaining balance of the auto loan
- Proof of income
Before approving your application, the lender will inspect the vehicle to determine its value and offer you a proportional amount. At this point, you should also shop around and compare offers from multiple lenders to find the best rate.
Make sure to ask questions before you sign the paperwork, including
Title loans have high interest rates and late payment fees, so you may want to consider alternatives, including:
- Personal loans
- Credit cards
- Asking friends or family for a loan.
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