Categories: Business

How do car title loan works in Canada

If you’re in need of fast cash and have a car, a car title may be your best option. Read our post to learn more about the steps it takes to get a car title loan and how they work in Canada. Getting a fast title loan is easy. It is simple and does not require a lot of time or effort.

And no one feels the need to rush with these loans because they do not have any type of hidden fees associated with them.

Car Title Loans: The Basics

A car title loan is when you borrow money against the value of your vehicle. If you stop making payments on this type of loan, your lender can take possession and/or sell the vehicle without notifying you. You should only take on such an arrangement if you are sure that you can make payments on time. Otherwise, it will be extremely difficult if not impossible for you to fix things later on down the road.

Getting Approved for a Loan

In Canada, you must be at least 18 to get a  loan. You will also need to be employed and/or have steady income so that you can make payments on time. Your previous credit history is not taken into account when you borrow this type of money, which means that no credit checks are performed on your behalf.

The Steps Involved in a Loan

Applying for a vehicle title loan is easy – all that’s required is the following paperwork:

  1. Bank statements – Show your lender your most recent bank statements so that they can verify your income.
  2. Lease agreements – If you are currently leasing a vehicle, you can use the lease as proof that your income is steady and reliable.
  3. Vehicle documents – Your lender will also need to see your vehicle title and registration. They will use these records to determine the current value of your vehicle.
  4. Personal information forms – You will likely be asked to fill out personal information forms about yourself, including income earned, assets owned, etc.
  5. You must have a vehicle that is not more than ten years old.
  6. You must provide proof of legal age.
  7. You must have a valid Canadian driver’s license.

Car Title Loan Payments

If you’re a Canadian looking for a loan against a car, then you’ve come to the right place. Below are some of the facts and figures about what title loans are and how they work in Canada as well as how to receive approval from your lender.

  • Before deciding on this type of loan, it’s important to understand all the terms that go along with it.
  • It’s also important that you find out whether you’ll be able to pay this type of loan back on time and not have it affect your credit score too much.
  • You will need to be able to start receiving regular  loan payments as soon as possible.
  • The amount that you can borrow on your lease agreement can range from $600 to $5,000, and all lenders have different terms and conditions. You’ll need to ask for a few quotes before deciding on which arrangement is right for you.

Pre-Approval vs Post-Approval Loans

Most lenders have a pre-approval option, which would allow you to get up to three quotes from several companies before choosing one. This process may take about two weeks to complete.

Title loans are easy !

Title loans are much easier to get. However, these payments are known as post-approval loans. The results of these kinds of loans will be provided to you immediately.

How long your car title loan lasts will also depend on numerous factors, including the type of loan that you decide on and the lender that you choose.

Many lenders have repayment periods for their vehicle title loans that last up to two years, while others only offer a repayment period lasting up to one year. A heavier down payment may allow you to receive a one-year loan with some lenders, but others may not offer any kind of longer payment period at all.

Title loan payments can be a major hassle to receive as the end date for this type of loan approaches. This is why many lenders are offering a shorter repayment period with no maximum time limit.

In order to receive an approval, it’s possible that you may need to provide additional documentation. Many lenders require you to provide the following: A letter stating that your vehicle has value and is worth what you’re borrowing against it, preferably from an auto dealer; An identity document (such as a driver’s license); Evidence of employment; Evidence of steady finances. This will likely be required whether you decide to get a post-approval loan or not.

Keep Driving your car during loan terms

It is critical to keep driving your vehicle during the loan period as well. The rules around this vary from lender to lender but typically you must still provide evidence that you are using this as your primary means of transportation while on loan.

Do not drive without proper insurance: All title loans require evidence of full insurance coverage on your vehicle. The rates and limits associated with this can vary greatly based on the amount that is borrowed and the term that it’s being paid back over.

You can get a loan no matter which province you live in. However, as many car title loans companies focus on specific locations, you may be able to find the right lender for you by searching online. 

Lenders may also require that you pay upfront before being approved for a loan. The reason for this is so that their intermediary (along with your documents) can be verified and verified as authentic. This is why it’s important to keep all original forms of identification on file along with copies of other personal documentation. 

Note: Multiple lenders may have different policies when it comes to paying bills and debts back over time.

 

James Cook

I am a freelance writer who specializes in email marketing campaigns, blogs and site contents. He is graduated from Cambridge University with a bachelor’s degree of arts in creative writing. Writing has always been his passion and now he is fulfilling this dream by writing various articles and blogs for various sites and helping them to make an impression among their competitors.

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