When you need money to finance a purchase, pay off bills or for any other reason, a loan is a common option. It would be nice to always have the money we need in a savings account, but sometimes this isn’t feasible.
The problem is when you want to get a loan in Texas with bad credit history. Most lenders heavily weigh your credit history, and more specifically your credit score, when you apply for a loan. Borrowers with higher credit scores can take out loans at lower interest rates, saving themselves quite a bit of money.
Whether the lender approves or denies your application will also depend on your credit. Many lenders will automatically deny you if your credit score doesn’t meet a certain minimum requirement. This can make it difficult to get a loan if your credit isn’t good to excellent, but fortunately, there are still options available for you.
What Can You Do If You Have Bad Credit History and Need a Loan?
Need to get a loan in Texas with bad credit history? Traditional lending options, such as banks and credit unions, are likely out. They will usually deny your application because of your credit score, which means that not only are you still left searching for a loan, but your credit score will take a small hit because of the hard inquiry from the lender running a credit check on you.
Even if one of these traditional lenders approves you, it could be for a very small loan that doesn’t meet your needs.
One of the most convenient options is a title loan company. There is a key difference between a title loan company and your typical lender – instead of using your credit history as the primary factor in its decision, a title loan company bases any potential loan on the value of your car. In fact, your credit never comes into play, as the title loan company won’t even check it.
Both the approval process for a title loan and the amount you’re approved to borrow depend entirely on the value of your car. You can typically get the loan on the same day or by the next business day, as well, making title loans an excellent choice if you need money quickly.
Getting a title loan is a simple process. Here’s how you can do it:
1. Gather the Items You Need to Get a Title Loan
The requirements for getting a title loan are much less stringent than they are with a bank. You’ll only need to bring the following three items with you to show the lender:
• Your car
• Your car title
• Your government-issued ID
Since your car is what the lender takes into account for the loan, they will need to see the car in person. What they will do is look up your car in a vehicle value guide using its year, make, model and mileage. They’ll then perform a brief inspection of the car to determine its condition, and check the value listed in the guide for a car in that condition.
The lender will use your car’s current market value to decide how much they can loan you. Lenders will usually issue title loans for up to 30 to 50 percent of a car’s current market value. Texas puts no limit on title loan amounts, which means it depends on your car and how much the lender is willing to loan you.
The lender will keep your car title during the term of the title loan. Once you’ve paid back your loan, the lender returns your title immediately. Note that the title must be lien-free and in your name.
Federal law states that all title loan borrowers need to be at least 18 years of age. To verify this, the lender must check the date of birth listed on your ID.
2. Find a Title Loan Company in Your Area
There are many title loan companies in Texas, and this can make it hard to select one. Fortunately, there’s an easier way to find a lender. We offer title loan help in Texas through our online application. All you need to do is fill out our online application, listed under the Apply section, with some basic information about your car. The form will then ask you for your contact information.
After you finish up that form, we’ll have one of our loan representatives follow up with you. The representative will confirm your information and connect you with a title loan company near you.
3. Visit the Title Loan Company
The final step in the process is visiting the title loan company in person. This doesn’t take long, as most borrowers are in and out in less than an hour.
You’ll need to sign some title loan paperwork to make the loan official, and let the lender perform that brief inspection of your car. Once that’s complete, it’s just a matter of handing over your car title and getting your loan.
Here are a few of the most common title loan questions, and their answers:
How Long Is the Loan Term?
The state limits loan contracts to 180 days, but most title loan companies set up 30-day terms. The good news is that if you reach the end of your title loan term and can’t pay it off, extending a title loan is a quick, easy process.
What Can I Use My Title Loan for?
You can pay for anything you want with a title loan. Most borrowers use title loans to handle emergency expenses, such as car repairs, replacing a home appliance or paying a doctor’s bill. Others use their title loans to pay off past-due bills that could otherwise lead to more serious issues, such as late fees and negative marks on a credit history.
There are also people financing business expenses or paying for college with title loans. What you do with your money is completely your decision.
Do I Need a Job to Get a Title Loan?
Texas does not require title loan companies to get proof of income or employment from borrowers, and most don’t. Instead, they will ask you if you’re capable of paying back the loan. There are plenty of Texas title loans for unemployed people; what’s important is being able to pay off what you borrow.
It’s a good idea to have a source of income so you can pay the loan. But it’s understandable if you’re waiting to start a new job or if you work as a freelancer and don’t have traditional employment.
Having bad credit history can be a major detriment when you’re trying to get a traditional loan in Texas. That’s why it’s a good idea to understand your other options. There’s more out there than just the normal lenders people try.
Title loan companies make it fast and easy for anyone with a car to get a loan in Texas with bad credit history. You should work on improving your credit, but until you’ve done so, it’s nice to have title loans as an option when you need them.