Canadian Title Loan Requirements: What You Need for Fast Cash
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Are you among the 28% of Canadians who find themselves short on money at the end of the month? If you’re faced with a financial emergency, such as unexpected medical bills, taking out an auto title loan is a quick way you can borrow money to cover the cost.
You can get a car title loan if you meet a few simple criteria. Here’s what you need to know about title loan requirements in Canada.
How Do Car Title Loans Work?
A car title loan is a secured, short-term loan that uses your car as collateral. You can still drive the car while you make the repayments, as the loan is secured against the title.
The lender will charge interest rates and administration fees on the loan amount. You should make sure you get quotes from several different lenders before you agree to a loan. That will ensure you get the best deal with the lowest rates.
How Much Can I Borrow?
The amount of money you can borrow against your car title will depend on its value. You can usually borrow between 25-50% of the value, based on how much the lender appraises it is worth and the maximum amount they will lend.
Lenders tend to use the Canadian Black Book to value your car. But different lenders may quote you different amounts based on its condition, so it’s worth shopping around.
What Do I Need to Qualify?
To qualify for a car title loan in Canada, you must be a Canadian citizen or permanent resident over the age of 18 and own your car. Some lenders will provide a loan even if the car is not paid off in full.
As a car title loan uses your vehicle for the loan collateral, you don’t need a good credit rating to get approved. You can get a loan even if you are unemployed, as long as you can prove that you have some form of income to repay the loan.
How Can I Find a Reputable Lender?
It is important to do your research to find a trustworthy loan provider. This will make sure the process goes smoothly.
In some provinces and territories, car title loan providers must have a license or registration to operate as a lender. Be sure that the lender you choose displays the required license or registration documents in their store or on their website.
Check out customer reviews to find a lender that has a reputation for providing good customer service. Steer clear of lenders that have negative reviews.
What Documents Should I Provide?
When you apply for a car title loan, you need to provide proof of your identity and vehicle ownership. The documents you need to show a lender include:
- government-issued ID
- vehicle title
- vehicle registration
- proof of insurance
- proof of address
- evidence of finances
Lenders require you to provide proof of your insurance to ensure that they will still be repaid if you have an accident or the car is stolen.
Some provinces and territories in Canada require you to inform your insurance provider if you register a loan on your car. Check the requirements where you live to avoid the insurance company denying your claim.
If you apply for a loan online, you also need to provide photos of the vehicle so that the lender can gauge its condition. This will help them to decide how much the vehicle is worth and how much you can borrow.
How Can I Receive the Money?
One of the main advantages of a car title loan over a traditional loan is that you can receive the money quickly.
If you take your car to a lender’s physical store for an appraisal, you can often get approved and drive away with the cash on the same day. If you apply online, the lender can transfer the money into your bank or credit union account.
What Fees Will I Pay?
Lenders in Canada are not permitted to charge you more than 60% in annual interest and fees. Your interest rate will depend on the amount of money you borrow and the term of the loan. Interest rates also vary among lenders.
As well as interest rates, lenders can charge fees to appraise the value of your vehicle, search the title to check if there are existing liens, and register the loan. They can charge administration fees to manage your account and roll-over fees to extend the loan if you decide to refinance it. You will also be charged fees for late or missed payments.
Make sure the lender includes all their fees in their quote so that you’re not surprised by hidden charges once you’ve taken out the loan.
How Do I Repay the Loan?
You can take out a car title loan with a single repayment, or you can repay it in installments. A single-payment loan is usually repaid within 30 days. An installment loan can have a specified repayment schedule of a few months to a few years.
Your loan contract will specify the repayment schedule as well as the interest rates and other fees the lender will charge over the loan period. That will help you to budget your income and expenses and ensure you repay the loan on time.
When you take out the loan, you can give the lender a pre-signed check for the full amount, or you can pre-authorize them to debit the repayments from your bank account.
Meet Car Title Loan Requirements for a Successful Application
Facing a financial emergency can be scary, but taking out a car title loan is a quick and easy process. If you meet the car title loan requirements, you can have the money in hand on the same day you apply, allowing you to manage your expenses. Be sure to gather all the documents you need so that your application gets approved fast.
At Fast Action Finance, we’re here to help. Contact us to find out how much you can borrow.