How Does a Title Loan Lender Calculate Your Car Title Loan Amount?

If you’re interested in applying for an auto title loan, you may be curious to know how lenders determine the loan amount you’d receive. Do title loan lenders focus on difficult requirements? Is it simple to get a good cash total? How are title loans calculated? Do they use a title loan calculator?

When you inquire about a title loan with your lender or provider, these are the factors they make to calculate your loan amount:

A Qualifying Vehicle with a Title in Your Name

The loan amount you’d obtain is largely dependent on the market value of the vehicle you intend to use as collateral. To be clear, title loan lenders assess your car’s value on its market value, not its retail value. That means if you bought a car at an original price of $4,000, but with a current market value of $2,500, the assessed loan value would be closer to the second number. Fortunately, some tools can help you calculate a rough estimate of your vehicle’s value! Simply input a few details from your car, and you could determine if your car qualifies for auto title loans.

The Laws of the State You Reside In

Not only would your vehicle influence a title loan’s amount, but your state laws also have an essential role to play. Each state will have different laws when it comes to applying for a car title loan, so this factor will also influence your final amount. You can always go to your local Department of Motor Vehicles to see how your state laws impact the cash total you’d obtain. Or, speak to your title loan lender or provider to help clarify things.

Applicable Interest Rates

Be aware that the interest rates may depend on where you live apart from the agreed-upon terms from the title loan lender and the borrower. If you find this interest rate or monthly payment too high, then you might want to ask for an adjustment on the term. Make sure you talk to your lender about a reasonable loan term before you apply for emergency cash. Also, keep in mind that the interest rate can also depend on whether you make title loan installments on time, and you can reduce the amount you owe if you make a sizable payment on each due date.

Your Ability to Pay Off Auto Title Loans

Borrowers must show proof of income from a 9-5 job or evidence of your ability to repay a loan in full. If you are self-employed, a copy of your bank account information could help your chances of receiving approval for a higher loan amount.

How Can I Use the Calculation on My Car Title Loan to My Favor?

Depending on the state you live in, you can ask for a fee schedule to know the loan amounts and their corresponding interest rates. At the end of the day, your title loan lender will be the one to determine the final figure that will work best for them and your personal needs. However, there are a few things you can do once you receive a calculation on your title loan:

  • Research the Market Value of Your Car: As soon as you know how much money you’ll need to borrow, you can research how much you can earn with your vehicle title. If your projected amount comes up short, see where else you can generate your necessary balance. If possible, you might have another vehicle that you can use its title to get a better loan.
  • Find Ways to Earn Extra Money: Having a side gig to earn funds outside of your paycheck could help decrease the amount you need to loan or shorten the payment period by using the extra cash to make payments. 
  • Weigh Your Options and Ask for Assistance: You could always talk to your title loan lender or provider if you want a re-calculation that can be more manageable for you! They could help make re-calculations that could help create lower interest rates, a longer repayment period, or adjustments in the loan amount. 

Now that you know how title loan lenders calculate your loan, you could apply for a car title loan today! Don’t hesitate to contact your lender or provider if you need assistance.

The application process can be quite straightforwad. For some title loan options, you can inquire online or over the phone with a title loan agent! It can be that simple to learn about how title loans are calculated.