If you're considering a title loan, you may find loan terminology confusing. Understanding title loan terms & definitions is essential for making informed financial decisions.
This comprehensive glossary breaks down key title loan definitions, so you can confidently apply for a title loan knowing exactly what each term means.
Essential Title Loan Terms & Definitions
1. What Is a Title Loan?
A title loan is a secured loan that uses your vehicle's lien-free title as collateral. Your car’s value secures the loan, which the lender will hold onto while you pay during the repayment period. The vehicle's value and loan amount you can receive are determined by a quick vehicle inspection during the application process. However, you can still use your car as usual during this time. Once your loan is paid in full the title will be returned to you, the borrower.
In contrast to other loans, a loan on your car title generally offers larger borrowing amounts and longer repayment periods, which is why it is important to know these key terms.
Learn more about how a title loan works here.
2. Credit Score & Title Loans
Your credit, or credit score, is a measure of how likely you are to repay your debts on time, if at all. A high credit score represents your trustworthiness to a lender and makes you much more likely to get your loan application approved.
On the other hand, poor credit may negatively affect your chances of approval, as well as your interest rate and terms. However, a title loan for bad credit holders is still a real possibility for many borrowers.
3. Title Loan Eligibility
Understanding title loans and how eligibility works is important. Your eligibility measures whether you can qualify for a title loan. For example, if you have the following required items, you may be eligible to get a title loan:
- Your driver’s license or valid state-issued ID
- A lien-free car title
- The vehicle itself for inspection
Additionally, your eligibility depends on other factors that may affect whether you get approved, how much you qualify for, and what terms the loan will require. Check with your direct lender to learn more about these additional factors and what they mean.
4. What Does Lien-Free Mean?
When it comes to title loan terminology, this is probably the most important of title loan terms to understand. You may have heard the term lien-free for this type of loan, and it’s a lot easier to understand the meaning than it sounds. Lien-free means your car has no outstanding debts or judgments against it that could diminish its value.
The title of your car is the most important part of a loan since it’s the lender’s security, allowing them to safeguard the loan if a borrower defaults.
5. Secured vs. Unsecured Loans
Understanding title loans and the difference between a secured and an unsecured loan can help you choose the best loan for you.
A secured loan uses some form of collateral (in this case, the title of your car) to protect the lender’s interests, allowing them to offer larger amounts of money more feasibly in a loan. A title loan is a type of secured loan requiring the title of your car to be squeaky clean (lien-free and in your name) to get a loan.
On the other hand, an unsecured loan requires no collateral, which can be preferable if you don’t have an asset to protect the loan.
Learning title loan terminology like secured vs. unsecured loans is easy and can make the difference in getting the emergency cash you need.
6. What Is a Loan Term?
The loan term reflects the time to repay your loan in full. Title loans usually have longer loan terms (2-3 years), although this can vary by lender.
Understanding title loan terms Delaware is an important step for Delaware residents to decipher when planning to repay your loan and satisfy your policy; moreover, you’ll want to break down your loan term into monthly payments so you stay consistent with your account and obligations while the loan is being repaid. Don’t be afraid to ask your lender if you have any questions regarding your loan term.
How to Apply for a Title Loan with Delaware Title Loans, Inc.
Now that you feel confident with the title loan glossary Delaware, you can apply for a title loan with Delaware Title Loans, Inc. Depending on your eligibility, you can get anywhere from $300 to $15,000.
After you complete our online inquiry form, a representative will contact you to explain the process and arrange a convenient location to meet. You’ll bring the following to your meeting:
- Driver’s License or State Issued I.D.
- Lien-Free Title to Your Vehicle
- Your Vehicle for Inspection
Once there, the representative will inspect your vehicle, verify your documents, and check the VIN on the car. After assessing everything, they’ll let you know whether you’re eligible for a title loan. If you qualify, you’ll receive the money you need the same day or the next business day.
Get a Delaware Auto Title Loan Today!
Now that you’re familiar with key title loan terms & definitions, you can decide if a title loan is right for you. Whether you need cash for emergency repairs or unexpected expenses, a title loan can provide fast financial relief.
Take the next step! Apply for a title loan with Delaware Title Loans, Inc. today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
