NEW YORK, February 9, 2023 (Newswire.com) - iQuanti: When someone needs to borrow money fast and they don't want to go through the conventional loan process, one option they may want to consider is a title loan. As long as the borrower owns a vehicle that's in relatively good shape with a clean title, then a title lender may be happy to work with them. Here are the basics of how a title loan works and what people will need to apply for one.

What is a title loan?

Title loans are secured, short-term in-person or online loans where the borrower uses their vehicle as collateral. Collateral is something of value offered to the lender by the borrower in case the loan is not paid back in full by the agreed-upon date.

Title loans offer fast funds and are granted to borrowers of all credit types. They also have a very simple application process and can often approve vehicle owners within minutes.

How does a title loan work?

The way a title loan works is very simple. The applicant will fill out an application on the title lender's website or at a store location. After submitting an application with personal and financial information to the lender, the lender will perform an appraisal of the applicant's vehicle. This will be based on several characteristics of the car, such as:

• Current market value
• Condition
• Mileage

Assuming the applicant is approved, the applicant will then turn over the vehicle's title to the lender. This title must be clean and free of any liens. In exchange, the applicant will be given an immediate cash payout worth 25% to 50% of the car's value and can continue using their vehicle throughout the duration of the loan.

At the end of the loan term, the applicant must pay back the principal plus any interest or fees. Usually, the borrower will have the option to pay the loan in full and have their title returned, or they may enter into an extension with the lender for an additional fee and interest charges. If the borrower is unable to pay back the loan, or the lender does not agree to an extension, then the lender may repossess the applicant's vehicle.

How to get a title loan

People who are considering getting a title loan should do the following:

1. Choose a lender

Search online to find a reputable title loan provider. Note that some vendors provide title loans online for an even quicker application and approval process.

2. Gather all necessary documents

Before applying for a title loan, borrowers may need to gather any documents needed for the application, including: 

• A valid ID and Social Security number
• Proof of income, such as a recent paycheck stub
• A clean vehicle title

3. Apply for the loan

Applicants can choose to apply for a title loan in person or online, depending on the lender. They should provide any personal and financial details needed, and double-check the application before submitting it to ensure all information is correct.

4. Pay the loan back

A title loan is only a short-term solution. Borrowers should make sure they have a plan for how they'll pay off the loan so that they can keep their vehicle.

The bottom line

People who need cash fast can leverage their vehicles using a title loan. Title loans are short-term loans that must be paid back in full, or the lender takes possession of the vehicle. While the borrower may risk losing their car, these loans offer an immediate solution for people with poor credit.