It's hard to kick back and relax on the beautiful coastal beaches of Delaware when you need fast cash to cover a surprise expense. If you need a quick loan but have a low credit score, consider applying for a title loan. Title loans are a convenient way to receive the cash you need today.
What is a title loan?
A title loan is a short-term loan you can apply for if you need cash quickly. Title loans use the title to vehicle as collateral, so you can borrow up to a particular amount of what your car is worth. After receiving approval on your loan, you will receive cash and then make payments until you repay the loan in full.
Since title loans do not require any credit checks, they typically come with high-interest rates and if you're unable to repay the loan, you may lose possession of your vehicle.
Delaware title loan requirements
The requirements to apply for a title loan online are far fewer than those you may need for a bank loan. To apply, you need:
- A Delaware driver’s license or state-issued ID
- A lien-free vehicle title
- Proof of income
- Proof of residency in Delaware
- A running vehicle
In addition to these requirements, you must be at least 18 years old. You also must not be actively serving in any branch of the United States military.
The title loan process
Applying for a title loan in Delaware is a quick process, and often takes less than an hour. You must complete six steps to apply for a title loan:
Head online and fill out a title application to tell us more about your vehicle and yourself.
Once you complete your application, lenders will then review and verify its accuracy.
After your information is verified, lenders will want to inspect your car to determine its value and to make sure it is safe to drive in Delaware.
Upon passing inspection, a contract will be made by your lender. This contract will explain the terms of your title loan agreement and include the repayment process, the loan's interest rate, and the amount you must pay.
You will receive your loan either directly in the form of a check or indirectly through direct deposit or wire transfer.
Once you receive your funds, you will then be responsible for the timely repayment of your loan. If you make all your payments, you'll receive your title back from your lender.
How title loans are regulated in Delaware
Title loans in Delaware are currently regulated under Delaware Code Title 5, Chapter 22.
Title loans are legal in Delaware, and there is no limit on the interest rates a lender can charge. Typically, interest rates in Delaware are 25% a month. Before a borrower can sign a title loan contract, the lender must make certain disclosures regarding the nature of the loan and the borrower's rights.
If the borrower cannot make the payments on time, the lender has the legal right to repossess the vehicle. At this point, the lender can no longer charge interest on the loan.
In Delaware, the loan closes out once the car sells at auction. In addition, if the vehicle sells for more than the amount of money the borrower owes, including interest, the lender must give the borrower the excess amount.
Finally, the lender must let the borrower know that the vehicle has sold and satisfied the outstanding amount on the loan.
Cost considerations and title loan alternatives
The cost of a title loan in Delaware is dependent on your loan amount and your APR. Here are a few examples to help illustrate the true cost of a title loan.
- Example 1: You borrow $200 at an APR of 300% and pay it back in 30 days.
If you took out a $200 loan and paid it back in 30 days, you would pay a total of $250 back to your lender in 1 payment. In this example, you’re paying $50 in finance charges to borrow $200.
- Example 2: You borrow $200 at an APR of 300% and pay it back in 6 months.
If you borrowed $200 and paid it back in 6 months, you would pay a total of $406.56 back to your lender in 6 payments of $67.76. In this example, you’re paying $206.56 in finance charges to borrow $200.
Personal installment loans: A better and more affordable way to borrow money with bad credit
Before deciding to take out a car title loan, you must understand the risks involved. You have other options if you decide not to apply for a car title loan.
For example, installment loans do not require that you use your vehicle as collateral for repayment. While an installment loan requires a credit check, the time you receive to make payments is usually longer than when repaying a car title loan.
Frequently asked questions
Here are some of the most commonly asked questions that we get regarding Delaware title loans.
Can I qualify for a title loan with bad credit?
Yes! You can still qualify for a car title loan even with a low credit score.
Can I get a title loan completely online with no credit check and no inspection?
Yes! You can get a title loan online without pulling your credit. However, your lender needs to inspect your to verify that your vehicle is safe to drive. Passing an inspection will also allow your lender to calculate the amount you can borrow.
Will I receive the funds from my title loan instantly?
In most situations, you will receive your loan on the same day of application if you finish the process before 2 p.m. EST.
Do you offer car title loans near me?
Yes! We offer title loans nearby through direct title loan lenders in many cities in Delaware, including:
- Delaware City
- New Castle
- Rehoboth Beach