Many car enthusiasts consider vintage cars to be priceless and spend time finding parts and making repairs to rebuild them.
When times get tough, they are reluctant to sell it for money. Instead, they prefer taking out title loans on old cars.
Title loans are loans given with collateral, such as properties or vehicles. If the borrower fails to repay the loan, the lender gets ownership of the collateral. They are popular loaning options as they do not require a good credit score and are quickly available.
It’s a common misconception that title loans are only possible for new in-demand cars. However, you can certainly get one on an old car.
Here is everything you need to know about getting a loan on an old car.
Table of Contents
How Do Title Loans Work?
To attain a car title loan, you must be above 18 years of age, the vehicle’s owner, and it must not already have any debt. You will require the other owner’s written authorization to get the loan if you are not the sole vehicle owner. They will also be responsible for repaying the loan.
Car title loans are attractive to people with bad credit, but these loans can have interest rates up to 300% and commonly ask for 100%. People often cannot repay such a large amount and end up losing the collateral. Ensure you design a proper repayment plan before taking out a title loan.
How Old Can the Car Be?
Title loans do not consider your car’s age. Instead, lenders are interested in the vehicle’s value, as it determines the amount you can qualify for. You can qualify for a title loan if your car has sufficient value and is safe to drive.
How Much Cash Can You Get for an Older Car?
Typically, the title loan you receive is worth 25% of the vehicle’s current value. Older cars have lower market values, so they are eligible for lower loan amounts. The exact amount you will receive will be determined when you enter the title loan process. However, you can get an estimated amount in the following manner:
- Enter details about your vehicle, such as its model, manufacture year, and mileage, into a vehicle value guide.
- Get your car inspected to assess its current condition.
- Check the car’s value with its corresponding condition in a value guide listing.
An idea of your car’s worth ensures you do not get cheated by the title loan lender. However, some states have set a maximum limit for a title loan. Even if your car is worth more, you will only receive the state’s price.
What Documents Does a Title Loan for an Old Car Require?
The documents required for an old car’s title loan are the same as for any other vehicle. You must reside in the same state you are acquiring the loan. You also must have a valid driver’s license and vehicle papers that list you as an owner, and you must produce your Social Security number and proof of income to get the loan.
Key Takeaway
If you require money fast and do not want to sell an asset, taking out a title loan by putting the asset as collateral is a great option.
While this process does not require a good credit score and can be taken out on old cars, it has high-interest rates.
Before taking out a loan, make sure you familiarize yourself with the process and have a repayment plan in place.