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What You Need

If you need a way to get money without waiting around days or weeks for a loan application to process, then Dallas online title loans can be just the solution for you. A title loan is known as a way for you to pawn your car and still drive it, and you typically get your loan on the same day that you've applied for it. Here's what you need to know before you try it.

One of the key benefits of getting a title loan is that there aren't the stringent application requirements you have with most other types of loans. With a bank or credit union, you would typically need to bring quite a bit of documentation, such as proof of your address, income verification and tax returns from at least the previous year. That's not true with a title loan, where you'll usually only need the following three things:

  • Your ID showing that you are at least 18 years old, which is how old you need to be for a title loan because of federal law
  • Your car to demonstrate that you have possession of it and to show the title loan company what condition the car is in
  • Your car title, which must have your name on it and have no lienholders listed

Now, since the bulk of the regulations on the title lending industry are set up at the state level, requirements for prospective borrowers can be a bit different from state to state. In most states, all you'll need are the three things mentioned above, but there are a few states where you also need to show the lender proof that you're employed and proof of income.

How Pawnshop Loans Work

Although pawnshops provide a place where people can either sell goods they no longer want or buy secondhand goods at low prices, many of them also offer loans. Here's how the typical pawnshop loan would work:

  1. You would take the item you wish to use as collateral into the pawnshop.
  2. The shop would appraise the item to determine its value.
  3. The shop would give you a loan for a portion of the item's value.

Once you come back and repay what you borrowed, you get your item back. If you fail to do that, then the shop will sell your item.

The reason that the shop doesn't give you the full value of the item is because it wants to protect itself and make a profit if it needs to sell the item later. It's just like if you brought something to the pawnshop to sell it. The shop would only give you a portion of the value to ensure that it makes money by selling it.

How Title Loans Are Similar and Different to Pawnshop Loans

Title loans have many similarities to pawnshop loans, along with some key differences.

A title loan is similar in that you bring your car to the lender, and the lender appraises your car's value to figure out what it's currently worth. The lender uses the current market value of your car to set your maximum loan amount, which will be a portion of that value to protect the lender. States sometimes set their own maximums on title loan amounts, as well.

However, you don't need to hand your car over to the lender after you get your loan. You keep your car over the term of the loan, with the lender only keeping your car title in its possession. Your title gets returned to you upon repayment. If you default on the loan, the lender has the right to repossess your car. They can then sell it to cover what you owed on the loan.

State laws govern how the repossession and sale process works. Some states allow the lender to keep any surplus amount from the sale of your car, while others require the lender to send you any surplus amount. And some states allow the lender to bill you if the sale of your car doesn't cover what you owed on your title loan, while others don't let lenders do this.

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Making the Most of Your Title Loan

With their speed, convenience and flexibility, title loans can be an excellent option when you need a short-term loan. You can get the money you need without going through any sort of credit check, which means a poor credit score can't rule you out. You still get to drive your car, and although title loan terms typically last 30 days, you can usually extend yours if you need more time.

Just make sure that you have a plan in place for getting your title loan paid off. Don't become complacent because you still have your car. Just like with a pawnshop loan, you could lose your collateral if you fail to pay off what you borrow and the interest on your loan.