You may be rejected for a title loan if you have invalid or missing documents, no outright ownership of the vehicle, or an outstanding lien on the car.
Your application may also get disqualified if you have a spotty history of repaying your debts.
Title loans may be easy to get, but that doesn't mean there aren't a few checks and balances. You’ll need to meet several requirements before the moolah flows 🤑.
- The car title must be clear and complete. This is the most important document (hence the name of this loan type). If there is any inaccuracy or question about your title loan (i.e., who owns the car, incomplete sections of the title, the spelling of your name), then lenders may think twice about approving you.
- You must have sole ownership of the vehicle. In short, you can't get a loan for a car title in your grandma's name! Nope, just not fair to grandma.
- The vehicle must be lien-free. If you owe money on an auto loan, it is likely a deal-breaker. Just imagine the legal nightmare of a title loan lender trying to repossess and sell your vehicle, while a bank is also trying to repossess your vehicle. No bueno, folks.
- You must not have a history of defaulting on loans. While a credit check isn't common for a title loan, some lenders may look for patterns of delinquency in a soft credit check, especially if you are asking to borrow more than what your vehicle is worth. So, if your credit history indicates you often miss or delay payments, it could cause a problem. 🚩
Title loans are not heavily scrutinized like a mortgages, but you should go into the application process buttoned-up and prepared. Most lenders will be helpful and guide you, but understanding the no-can-dos, will help you get approved.
Good luck! 🤞