Auto title loans are a great option for those who need financial help from non- traditional lending institutions. You present your car to the lender who gives you a loan equivalent to a certain percentage of the value of your car. The lender will give you a check; you leave the title with them as you continue using the car. Most of these companies don’t have credit score requirement as long as they have a car title and have proof that they can pay the loan.
However, you may not qualify for the loan facility because of some of the factors below
When the car value doesn’t cover, the loan advanced
It is a principal of every lender to ensure that all loans are fully covered. This means that the collateral you present must have a value higher than the amount requested. This cushions the lender in case you are unable to repay and they have to result to repossessing the car. The total car value is discounted at a certain percentage say 80% and this is the maximum amount you’d qualify for. Thus if the amount requested is more than the car discounted value, then it is a straight decline.
When there is no repayment ability
You could be having the car whose value is enough to cover for the loan facility. However, it is not the lenders wish to resell your car and therefore, he must ensure that you’re in a position to repay the amount advanced. The business gross income will be used to calculate the amount that the customer can afford at the end of the month. This is used to come up with the amount of loan that you’ll qualify for. Sometimes, you could be having more than one credit facility from other lenders and this may reduce your chances of qualifying for the loan especially if your income cannot cover the entire exposure.
Status of the car
It is possible that the car could be attached with another institution as collateral for another credit facility. Most of the Title Loans Ocala companies will not accept such a car as collateral unless they are convinced enough that the remaining balance is repayable and doesn’t pose a future risk. If the title is jointly registered with another lender, then, no other lender would accept to have it since it’s of no value.
When the purpose is not clear
Borrower’s character is one of the key areas that lenders pay attention to. Any loan is borrowed for a purpose and this must be clear for the lender to give you a green light. Most lending companies will not accept applications from borrowers who can’t detail how the money will be used. Ensure you have a clear purpose and a budget of how you are going to utilize the loan proceeds. That gives the lender an assurance that the money will be used properly and therefore repayment will be seamless.
During your first meeting with the lender, ensure you get all the details on the requirements for a car tile application. That will tell you whether you qualify or not. There is no need of wasting all the time only to be told that your loan is declined- it is very frustrating.