How to Use Your Car as Collateral in North Carolina

You’ve got a sudden situation that requires cash fast, and you’re unsure where to turn. A bank loan is a no, your friends are tapped out, and you were hoping to avoid the interest that comes with payday loans. The good news is that if you have a car and income, you likely qualify for what’s called a vehicle title loan. Here’s what you should know about title loans in North Carolina.

What is a Title Loan?

While longer terms are sometimes available, these are short-term loans of 30 days or less. They are secured by the title of a vehicle you own outright, although in North Carolina some lenders will allow you to borrow even if you are still making payments on the vehicle. Such “vehicle,” by the way, can usually be a car, truck, RV, or motorcycle.

Do note that while the fact that the loan Is secured increases your odds for approval, you could very well lose your vehicle if you fail to make payments. So be sure you can pay the loan off before taking one out.

How Much Will I Be Offered?

That will depend largely on two factors: your vehicle and your income.  In deciding how much to lend you, the title company will generally consider the make, model, age, mileage, and overall condition of your car. It will also factor in any modifications or alterations, as well as the vehicle’s style. Some lenders will provide a loan calculator onto which you can input the above information and gain an idea of your potential offer.

The lender will also want to see your vehicle, but instead of having you drive it in for inspection, it will only require you to submit clear, recent photos of the vehicle from all angles, plus shots of the odometer and vehicle identification number. 

The other major part is your income; the lender will want to be certain you can repay a title loan. If you are employed, bank statements or pay stubs are sufficient. You don’t need to have a job, however. In North Carolina, if you have another source of regular income, that will work as well. Such sources could include Social Security, rental income, retirement account, settlement income, Worker’s Compensation, alimony, child support, disability payments, or self-employment.

What the title lender won’t focus on is your credit, although it might look at it. Your vehicle title serves as collateral, and that’s generally sufficient, along with steady income.

You’ll also need a driver’s license or other government-issued photo identification such as a passport, plus proof of residence (lease agreement or utility bill). Other lenders will require personal references or vehicle insurance.

How Soon Can I Get Cash?

You can apply completely online, which is a timesaver right there. Once you’ve sent in your application, including the required documents, you’ll probably get an answer that day. Once approved, your funds will likely be in hand the next day.

You’ll have options in terms of how you wish to receive your funds. For example, some lenders will permit direct deposit on a debit card, ACH transfer to a bank account, an overnight check, or a pick up at a local MoneyGram location. 

The bottom line is that title loans in North Carolina and elsewhere can get people out of a jam – fast. Because your vehicle is at risk, just be 100 percent sure you can pay the loan back before signing on the dotted line.

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