How To Get A Car Title Loan In Texas

Sometimes, you get down on your luck. It happens to the best of us, it happens to the worst of us. Often, a loan is the first way out you consider in a sink-or-swim situation like that. 

You may have even heard of car title loans, but you may not be sure what the specifics are. You might just be wondering whether you’re eligible for them, and I get the urgency. But before we proceed further, you need to arm yourself with some information.

Today, we’re going to go over all the reasons to get a car title loan in Texas, legalities and all,  and some reasons that make them less desirable.

What Is A Car Title Loan?

Before we get to Texas, or any state for that matter, let’s get a lay of the land first.

Car title loans are essentially short-term loans, usually extending up to a period of 30 days, given out to you with your car title held as collateral. You then work to pay off the loan in installments or the agreed upon timeframe with your lender. Failure to do so may result in higher interest rates, additional penalties or in the worst case scenario, loss of your vehicle. 

That’s why figuring out whether or not a car title loan is the right solution for you is so important, because it all boils down to how comfortable you are risking your car and the urgency of your situation.

How Much Can I Borrow?

Typically speaking, you can borrow up to 50% of the estimated current value of the car, but this may change if you owe any money on the original auto loan as well. 

However, the question is less how much you’re able to borrow, and more how many other expenses you may incur. The interest rates on these loans is often as high as 25%, and this simply keeps increasing if you do not pay the loan back in the given timeframe.

How Do I Get One In Texas? 

To get a car title loan, you usually only need to meet a lender. Once you do, all they require from you is the original car title, an inspection of the vehicle, proof of identification, and proof of insurance. Lenders may ask for another set of keys, or they may ask you to get an inspection done or get one done themselves by a third party they trust.

In Texas, you are able to extend title loans for up to 30 days for a maximum of 180 days. You can also customise the payment plan with your lender and discuss a solution that works for you, such as installments.

The Fine Print: Why Auto Title Loans Are Risky

So, now that you know that getting a car title loan isn’t a hard procedure at all, it’s time to talk about the potential dangers of doing so. Fast, easy cash usually ends up being more expensive than it was worth.

Bad Interest Rates: While some states offer customer protection in the form of a maximum threshold for interest rates on car title loans, typically, customers face exorbitant rates that are often a sizable amount of the original loan itself. 

Risk Of Repossession: You may very well not be able to pay the loan back. If this does end up happening, your car is, in all legal contexts, up for collateral. The lender is legally protected if they choose to sell the vehicle to cover the loans.

Hard To Pay Back: While they’re a quick way out, auto title loans often cannot be paid back, interest rates, fees and all within the timeframe of fifteen to thirty days, especially when customers usually already have ongoing strenuous expenses. 

Limited Options: Once a deal like this is made, you do not have many options out of it. If you do not pay the loan back, you risk losing your vehicle, so you may think to extend the loan, but this often comes with significantly higher interest rates and additional fees.

Conclusion:

While there are some situations that are urgent enough that a car title loan is the most convenient and logical solution, there are usually safer alternatives and streams of finance. 

Make sure you don’t risk your vehicle, whether by making a shaky deal, or by not having the proper papers in order by knowing everything you need to know to be safe!