Can You Be Denied A Title Loan?
JULY 13, 2020
Yes, applicants can be denied title loans if they do not meet certain requirements. Although credit scores are not a determining factor, auto title lenders will take the status of the car title and the potential borrower’s income into account. The main reason some people do not qualify for auto title loans is because they fail to meet one or more of these requirements.
When you apply for a car title loan, the vehicle that is being used as collateral needs to have a lien-free title. If the car has no equity, it is unlikely that the applicant will qualify for the title loan. In addition to having a clear title and ensuring that the car has adequate value, applicants must earn a reasonable income that allows them to pay off the auto equity loan. That is why it helps if you can provide a proof of income for the title loan provider.
Does this mean that self-employed individuals or freelancers without a regular source of income are automatically disqualified? Not necessarily. It is still possible to qualify for an auto title loan if applicants can prove that they can make the monthly payments. If you are looking to take out a car title loan that exceeds the vehicle's actual value, chances are the loan provider will deny your application. The car needs to have sufficient value to serve as proper collateral for the lender.
If you need fast cash to pay urgent bills or get out of a sticky financial situation, it can be demoralizing if your application is denied by a potential loan provider. Fortunately, the refusal does not bar people from submitting title loan applications in the future. Consider talking to a trusted lender for alternatives and/or solutions.