Car Title Loans in Arizona: What You Need to Know 
Are you having trouble with your finances? Or are you making a long-term financial solution for the rainy days?
We all experience that!
A car title loan can help you get cash fast to pay unexpected bills or cover emergency expenses.
But, you might risk losing your car if you don't make your payments on time! Understand the risks of using your car as collateral before taking out a cash loan.
To help you, we've compiled a list of the most important facts about auto title loans.
What Exactly Are Auto Title Loans?
An auto title loan (or pink slip loan) is both a short-term financial loan and a form of personal loan. It requires using the vehicle as collateral.
The borrower must be the sole owner of the vehicle to qualify. If the borrower defaults on the loan, the lender may sell the vehicle to recoup the cash.
The borrowers have lower incomes or generally bad ratings. A bad credit determines credit difficulties, making it difficult for them to qualify for a personal line of credit (LOC).
This loan has a high-interest rate due to the greater risk of default.
It has extra charges, which may increase costs. The borrower can roll the title loans over if they cannot make payments.
In those cases, the new loan would have higher interest rates and additional fees.
How Do Auto Title Loans Operate?
The average monthly charge of title loans is 25%, translating to an annual percentage rate (APR) of roughly 300%.
Title loan services also charge processing, paperwork, and loan origination costs. That is on top of the actual loan amount.
You could also need to buy extras like a roadside assistance plan.
A typical auto title loan operates as follows:
- You need a 30-day loan for $1,000.
- Charge is 25% (costs $250 to borrow $1,000)
- The lender gives a $1,000 loan amount in exchange for the title
- Repay $1,250 besides any extra costs the lender imposes in 30 days
Rollovers incur higher costs. The lender may allow you to roll over title loans into a current loan. That's if you cannot pay it back when it's due.
A typical title loan rollover operates as follows:
- Roll over the $1,000, 30-day loan (will increase by $250) on top of any other expenses
- Repay $1,500, plus extra fees the lender imposes for the rollover
- Borrowing $1,000 for 60 days will now be at least $500 due to the rollover
Even if you made partial payments, the lender might still take your vehicle if you cannot meet your debt.
Some lenders install GPS devices when you get title loans so that they may locate the car. They can deactivate the ignition system, facilitating repossession.
How to Apply for a Car Title Loan in Arizona
The ease of applying for Arizona title loans might surprise you.
Vehicle owners in Arizona have two options for starting the title loan process; either in person or by applying for an online personal loan.
The title loan lenders will appraise your car based on its value. They calculate how much cash loan you will get and run a credit check.
Luckily, even if you have bad credit and no source of income, you might be able to get an auto title loan approval and get the fast cash you need!
But, having a poor rating is not a guarantee of loan approval!
Some lenders still run a credit check. Applicants with good credit receive low-interest rates, lower payments, and better deals.
Lenders will give you a decision as soon as they have all the required documents. On the same day that you apply, you can get your title loans approved!
What Are the Requirements for a Car Title Loan?
A borrower must be the outright owner of the vehicle to qualify for vehicle title loans. Additionally, lenders need specific papers, such as some or all the following:
- Original and a clear vehicle title indicating sole ownership
- Proof of income
- Valid ID from the government that matches the name on the title
- Utility bill or other documentation showing residency in the same name as the title
- Currently registered vehicles
- Evidence of auto insurance
- Recent pay stubs or other evidence of ability to pay back the cash
- Two or more valid references' names, numbers, and addresses
- Working duplicates of the car's keys
- When you apply online, you can skip the vehicle inspection! Instead, take photos of your car, also one showing the vehicle identification number (VIN)
The lenders base it on the car's resale value. Likewise, you can get a title loan without having proof of income.
Even so, other lenders continue to run checks based on the status of the application.
Car Title Loans: Pros and Cons
If you need cash, you might take out a loan and use your car as collateral.
This may be a terrific method to receive some fast cash, but there are also drawbacks to receiving a title loan.
Before you even consider doing so, read the following pros and cons to gain a better understanding of auto title loans.
Pros of a Title Loan
Title loans are becoming popular due to their many advantages. Here are some of the benefits of an auto title loan.
1. Fast Cash
The most significant advantage of a loan is the ability to get cash IMMEDIATELY! You fill out an application and receive your loan proceeds faster than with other sorts of loans.
2. Reduced Credit Checks
Most lenders assess the borrower's credit to see if they qualify for a loan from the company. Many auto title lenders do not conduct checks and accept bad credit.
3. Keep the Car
You can continue to use your property as security for a loan. When you use your car as collateral for the money, you get to keep driving it as long as you make your payments.
Cons of a Title Loan
There are some potential issues with each loan. Here are some of the drawbacks of an auto title loan.
1. Interest Rates are High
Because poor rating is acceptable, automobile title loans have exorbitant interest rates. This circumstance might be disastrous for folks who are paying off their title loans!
2. Repossession Possible
You put your automobile up as collateral so the lender can get cash back if you default. Unfortunately, this can lead to the repossession of the vehicle.
3. Excessive Charges
Hidden fees are in the contract's fine print, which includes repossession fines. That's if you cannot pay, credit insurance, and much more.
What are the Alternatives for a Car Title Loan
These loans are not the same as fast title loans.
If you need cash quickly, you must understand how they differ so that you can choose the best option for your present situation.
1. Payday Loans
This covers costs until your next paycheck arrives.
Applications can be completed online, and borrowed cash can be credited to your bank account the same business day you apply. This does not require collateral.
A bank account with a debit card or checking account is required.
2. Personal Loan or Bank Loan
Banks have straightforward repayment arrangements. If you choose a personal loan, try comparison shopping to get the best price possible.
Personal loans provide the cash you need, including debt consolidation. Personal loans have two types: secured and unsecured loans.
3. Business Loans
This is a short-term loan that allows you to invest in your firm while controlling the impact on your cash flow.
There is no need to rely on other credit institutions for working capital. Short-term loans are appropriate for both new and existing enterprises.
Of course, these are catered to those who have small businesses and need the funds to scale up.
4. Peer To Peer Loans
A type of personal loan that's easier to get than one from financial institutions.
The bank still has to approve the loan. Lenders use the bank to execute checks on borrowers, link borrowers to lenders, create loan agreements, and manage payments.
5. Cash Advance on Credit Card
Cash advances can be costly and should be managed similarly to a short-term loan to prevent accruing interest.
Taking out a cash advance from your card company can be problematic if you don't plan on repaying the cash within the next few weeks.
6. Friends and Family Loans
You may be able to secure the money loaned for low or no interest, or they may offer to gift you the cash.
If you've had difficulty repaying someone in the past, consider creating a written contract or a signed agreement with a payment schedule that works for both of you.
7. Seek Credit Counseling or Debt Counseling
Anyone who is in debt should consult with a competent financial counselor. They can assist you with debt management, budgeting, and financial needs.
8. Extra Part-Time Job
Consider acquiring a part-time job if you have the time.
This can help you save a few dollars each week for emergency cash or to help with any bills that you may not have been able to cover in the past.
9. Local Charities and Churches
Many local churches may aid you when you are in need, and depending on your circumstances, this may include providing emergency cash support.
Other charities provide assistance with clothing, housing, food, education, and other necessities.
11. Paycheck Advance
Your company may be able to advance your paycheck. This is only available in some states, and even if it is, it is at the discretion of your firm.
However, it never hurts to check with your boss to see whether this is possible.
Frequently Asked Questions
To understand the loan process a little more, here are some common questions to help you!
Can Unemployed Applicants Get Title Loans?
Yes, you can apply online or in the store location for this personal loan even if you are not working.
If you can offer other proof of income such as pension benefits, social security benefits, severance pay, annuity, and so on, you could be eligible.
What Vehicles are Eligible for Title Loans?
Most lenders provide title loans for any type of vehicle.
They do car, van, boat, truck title loans, motorcycle title loans, and commercial vehicle title loans.
What Is the Fair Credit Reporting Act (FCRA)?
It is a federal legislation that governs the gathering of credit information from consumers and their access to credit reports.
What is a Registration Loan?
A registration loan in Arizona is a means to borrow money by utilizing your vehicle's registration.
A registration loan implies that you are still making auto payments. If the necessity arises, you can obtain a lump sum of money.
Can I Drive a Salvage Title Car in Arizona?
In Arizona, you CANNOT insure a vehicle with a salvage title.
Salvage automobiles are cars deemed a total loss, which means they are too damaged to repair and cannot be legally driven.
What is a Principal Reduction?
It is a reduction in the amount owed on a debt.
As an alternative to repossession, a lender may give a principle reduction to provide for the financial needs of a borrower.
Does South Carolina Do Title Loans?
Yes. If you live in South Carolina, you don't need to go to a store to acquire a title loan. It is possible to do it online.
How Do I Know if I Have a Clear Title?
Your local tag agency should be able to provide you with information about the vehicle you are interested in purchasing.
All you need is the vehicle identification number, and they can look up the vehicle's history and data.
Borrowing money is a common occurrence in adulthood. Almost everyone requires a loan at some point in their lives.
Whatever your purpose for borrowing money, professional lending solutions are numerous and diverse nowadays.
W sure you've already determined whether you'll proceed with your title loan application now that you're aware of the whole process.
You can always go to a local loan service, or applying online is also a convenient way!