Car Title Loans in Colorado: A Complete Guide
Are you tired of being rejected in long lines for loans because of poor credit? It might feel hopeless, especially when you're out of money.
But worry no more.
Almost anyone with a vehicle - whether it's a car, truck, or motorcycle - can get Colorado car title loans.
It's such an EASY process, and it might take less than a day! You'll be on your way to borrowing cash to cover your financial emergency.
This guide will teach you how to get car title loans in Colorado.
Fast and Accessible
There's no easier way to get a loan than applying for a title loan!
No traditional loan or bank can compare to the EASE, ACCESSIBILITY, and SPEED of the title loan process.
There's little paperwork involved (especially for online loans), and they don't require much paperwork. Sometimes they don't even need a credit check!
Cash loans online take less than four business days to get money. You might even get your cash the same day you apply for the Colorado title loan!
Getting the borrowed money in one hour through a drive-in is not unheard of.
Plus, the online factor makes it an even easier process. The claims of "online instant cash" are real. You won't have to limit yourself in your state alone.
Plus, you can drive around with the car you registered as collateral!
When Should I Get a Title Loan?
An American title loan (a Colorado one included) is a short-term loan meant for emergency funding.
It's not a permanent solution for fixing financial issues. Still, it might be the best choice for a short-term crisis when there aren't many options.
Not for the Long-Term
With the high-interest rate, title loans aren't meant for business investments.
They're not meant for starting your mom-and-pop. And anyone who uses title loans for their start-up probably has no business sense.
Few people take title loans in Colorado to move up the economic ladder unless they have a strategic, long-term plan.
Title loans are meant for personal and household purposes.
Personal Financial Emergencies
Sometimes a loved one ends up in the ER, and you can't find ways to pay the urgent bill.
Sometimes life gets hard, and you can no longer ask for an extension for rent or utility - you need to pay the urgent bill.
Or sometimes, that home repair has to be done ASAP. Maybe the hole on the hurricane's wall doesn't give much privacy, or your kids or younger siblings can't work without the lights.
Title loans in Colorado are meant for emergencies. They're quick and accessible and don't discriminate against borrowers with bad credit.
Who Are Title Loans For?
Title loans are meant for people with a vehicle who might not be able to borrow from traditional lenders for emergencies.
They can be any of the following:
- People with a bad credit history tend to get rejected by banks and other conventional lenders.
- Those without access to savings, credit cards, or wage advance policies.
- Anyone who needs cash ASAP - no matter their credit record!
The nature of an auto title loan is based on the borrowers they cater to. They're easy and fast to sign up for - great for emergencies!
Many deposit funds in your bank account within a single business day. They also don't require that much paperwork.
Plus, not everyone can be creditworthy. Lenders understand that life is hard. So when they make credit checks, they let many people with poor credit get title loans.
Can I Still Apply for Colorado Title Loans Without a Bank Account or Employment?
Lenders will not likely allow people without bank accounts to have an auto title loan.
Suppose you don't have a bank account. In that case, you have to find a lender specializing in lending to borrowers in similar situations.
As for unemployment, your chances are LOWER if you have no regular income.
That said, it won't hurt to ask the lender you're interested in for details.
What if I Have a Bad Credit Score?
Many Colorado title loans are advertised towards loaners with poor credit - and even borrowers without a credit score!
Though there's a high chance of getting a loan with a bad credit score, NOT ALL customers get approved.
You might have to pay more if you get approved with a bad credit history.
If you have poor credit and still manage a loan, the loan amount might cost more compared to creditworthy borrowers.
But don't fret if a lending company requires a credit check. A credit check is usually a good sign that the company wants to avoid debt failures.
If they rejected you, that might mean they know you'll probably lose your car with their loans!
Repaying and Borrowing Terms
Regarding Colorado auto title loans, how much you can borrow (your loan proceeds) depends on some factors.
How much you'll repay also depends on how much you borrow.
Your financial charges and interest rate (i.e., how much you'll pay) and the maximum loan amount (i.e., the most money you can borrow) depend on the following:
- The payment plan (lump sum or installments),
- Your ability to pay back the loan, and
- The vehicle's year, condition, and value.
How Much Can I Borrow?
Again, it depends on your payment plan, ability to pay back, and vehicle.
But you can't borrow more money than what your vehicle costs. The maximum loan amount is only a portion of your vehicle.
Usually, the loan amount is 25% to 50% of your vehicle's actual value.
NOTE: The value of a used car depreciates over time. Even if the vehicle costs $40,000 in the shop, you might not even get $10,000 for it.
An average loan amount is between $1,000 to $1,200. Some can even go beyond $25,000.
But don't get excited if your vehicle gives more money than you need.
Don't feel like you should get more because your car costs more. Borrowing more money now means paying more money later.
How Much Money Do I Repay?
There's a massive caveat for all its ease and accessibility: title loans are costly, whether from San Jose or New York.
The interest rates are notoriously high - the APR is rarely lower than 100%!
They usually have an average monthly fee of 25%.
That means if you borrow $1,000 and you're expected to make a payment in 30 days, you'll have to pay a finance charge of $1,250.
That does not include other loan-related fees, like processing or documentation fees.
So keep your maximum sum to a minimum. Don't get more than you can afford.
What Payment Methods are Accepted?
It depends on the company, but most lenders accept hard cash, checks, debit card, and Western Union methods. They generally require bank accounts.
Suppose you're unsure whether your payment method is valid. In that case, you can contact your desired lender through their phone number, email, or website.
Vehicles as Collateral
As mentioned, car title loans in Colorado aren't limited to cars.
Trucks, boats, recreational vehicles, and motorcycles, among others, are qualifying vehicles for most lenders.
If you have other vehicles not explicitly mentioned above, ask the loan companies you have an interest in to find out what they count as qualifying vehicles.
What Will Happen to My Vehicle?
You'll still get to drive around in your vehicle.
The lending company only deals with your legal title, while you haven't missed any payments. However, some direct lenders install a GPS device or make a copy of your keys.
If you don't miss your payments and they decide to repossess your car, you won't be able to drive away from Colorado!
They'll be able to take your vehicle - even by force.
Either way, even if your vehicle title is on loan, you'll be able to drive to work and keep your private transportation. The title loan process is hassle-free!
Can I Be Approved for a Loan Without a Car Title?
You'll usually need a free, clear vehicle title to get an auto title loan. But lending can still occur if you pay off most of your vehicle loan.
Either way, you need to own at least most of the vehicle. It might be obvious, but a taxi driver can't make their business-owned taxi the collateral!
Are Title Loans Legal in Colorado?
Title loans are illegal in Colorado, but that doesn't stop lenders from finding ways to provide their services lawfully to Colorado citizens.
You can get a title loan legally and safely as a Colorado citizen.
But check their site online to ensure the direct lender is registered as a legitimate lender. They need a federal license to provide loans.
And don't take the service of lenders of "affordable" title loans that don't provide the full terms and conditions before you sign the contract.
You might lose a lot of cash, or worse, they might be lending illegally.
How to Apply for American Title Loans
Each lender has slightly different processes, and each state has different loan laws. But most car title loans follow the same process.
Step 0: Before Starting
American car title loans generally have fewer requirements and less paperwork, no matter the state.
But you still need to think about the following:
- How much money do you need to borrow? Don't get tempted by high loan amounts.To ensure you'll pay on time, borrow only as much as you need.
- What vehicle will you use? Sometimes they won't even need a clear car title or full ownership! It still counts as acceptable property.
- How much can you pay? What interest rate can you afford? Is your income enough to make payments by each due date?
- What payment plans? What's your pay period? Will you be able to pay in one lump sum in 30 days - a single-payment loan? Or would you prefer installments - i.e., monthly payments?
Step 1: Choose a Lender for Colorado Residents
Search for online title loans that cater to Colorado residents for the best title loans for you. Since Colorado bans title loans, you'll have to find lenders that operate in other states.
Most direct lenders have a website where you can check their terms for online loans and additional information.
You want to ensure you won't lose your car, so study the lender carefully. There are also online services that will connect you quickly to American title loans.
But how do I choose the most suitable lender for me?
First, find a few trustworthy lenders.
After you find reliable direct lenders that cater to Colorado residents and fit your needs, choose the BEST DEAL.
- Find out if they cater to Colorado residents or if you're required to drive a long way to another state to finalize the loan.
- Discard any lender that does not state their interest rates and repayment conditions. Lenders must show you their terms before you agree to a contract.
- Pick the loan/s that fit your needs.
- To get affordable title loans, compare the APR of the auto title loans. The lower the annual percentage rate, the less financial charge you'll have to pay.
Step 2: Prepare the Legal Papers
Unlike traditional loans in Colorado, online title loan requirements are much fewer.
You won't need a stack of legal documents.
That being said, it's still a loan. You don't need all the documents below, but you probably have to prepare at least some of the following:
- Clear vehicle title (or at least with most of the loan for it paid off)
- Valid government-issued ID
- Vehicle photos, odometer, and identification number
- Social security card
- Proof of residency (e.g., utility bills, contract of lease)
- Income proof (e.g., bank statements, evidence of social security benefits)
TIP: Even if some of the paperwork is optional, it's better to submit as many papers as possible. The more evidence you can give of your ability to repay, the higher the chances of having a more affordable title loan.
Step 3: Complete The Online Application Form
While walk-ins to the physical site might be available, they're not as easy as they sound.
Colorado does not legally allow title loans within the state, so you might have to travel to other states just to have a drive-in application.
It's probably easier to apply online. Many online lenders give out title loans online to residents in Colorado.
The loan company will ask for basic details, including:
- Your full name
- Contact details so you can receive updates and be contacted over issues.
- Vehicle information - like its model and release date
Step 4: Review the Loan's Terms and Conditions
Many borrowers skip the legal fine print, but it's important to know what you're signing up for.
You don't want to get into unexpected issues like paying more than you expected or losing your car.
The terms of title loans depend on what state the loan originates from. Lenders usually provide Colorado car title loans in other states since they're not legal in Colorado.
Here are some questions you might want to answer when getting a title loan:
- Does the loan amount to less than 25% of your vehicle's estimated value, considering inflation and depreciation? That's a red flag and a lousy deal.
- Are there vague terms you want to clarify with the staff?
- Are you all right with the payment terms? You might also want to look at any additional fees, hidden fees, and pre-payment penalties.
- Does it follow the loaning laws of the state it operates in?
If you don't think their proposal will help you, you can contact them by phone or email to negotiate.
You can also contact them to ask for additional information.
When you apply online for online title loans, express written consent to the loan online by submitting the form.
Step 5: Wait for Your Money
The approval process can take up to 3 business days or less than a business day.
Same-day funding isn't uncommon. Don't be surprised if you get your cash on the same day or if you get conditional approval within hours.
After the final approval, you might be asked how to claim your money. You can opt for a direct deposit in your bank account, wire transfer, check, or hard cash.
That's it! It's that easy to borrow money.
How to Avoid Bad Loans
Some lenders aren't trustworthy. Avoid issues later on by checking these in the direct lenders' websites and contracts:
- Secured website: The website should begin with "HTTPS" and have a padlock icon at the browser's website address bar whenever you provide personal information.
- Title loan: Is it an actual title loan or a consumer installment loan in disguise?
- Lender's details: Ensure the lender provides the physical address of their office and company name on their website and contract.
- Registration in a state: By federal law, the lenders must be registered in the US state to which they mainly provide their services. It does not need to be Colorado due to Colorado's loan laws.
- Pressure: If the customer service agents called to force you to make immediate decisions, they're not trustworthy. Similarly, avoid loan offers involving solicitation through phone calls, door-to-door methods, and any method that pressures you to choose immediately.
- Full terms and agreements: Before you sign any form, check the legal text.
Make Sure It's a Title Loan!
Some direct lender companies disguise consumer installment loans as easy title loans.
But consumer installment loans have even higher annual percentage rates. Though their repayment period lasts longer, it's much more costly, and you'll lose a lot of money.
Don't let the friendly customer service agents and so-well-mannered managers fool you!
About an hour after you made a loan, you might find out that you're paying much more than you wanted to.
You can get in debt with a Colorado title loan - but only if you're not careful!
If you default on the loan, you'll lose your vehicle - and your means of transportation. You might find it more challenging to go to work every day without it.
The Consumer Finance Protection Bureau reports that one out of five people who roll over their title loans end up losing their car.
And if you're not careful, you can risk a debt spiral.
Choosing a Loan That Won't Lead You to Debt
You don't have to worry about debt if you make a plan to pay back your loan on time.
Before you apply for a loan, determine if you'll be capable of finishing the loan by checking the following:
- Payment schedule
- Interest rates
- Renewal and extension policies
- Any hidden fees
- Vague terms to clarify with the staff
Try finding out how much you should pay monthly (or only next month, if it's a one-time lump sum).
Check if you'll be able to meet the payment deadlines.
If you think you can do with less, don't borrow more than you need. The MORE you borrow, the MORE you have to pay back.
Making Sure You Can Pay the Title Loan
Setting up reminders for your payment due date/s can ensure that you will avoid any extra fees and complications that come with missing a deadline.
And if you're not at risk for pre-payment penalties, you can pay the loan early if you have extra money.
After all, lenders shouldn't punish the early bird that pays back within the pay period.
How Do I Avoid Debt if I Can’t Pay for a Loan I Already Applied For?
If your loan's cost hurts your wallet, we've assumed you've done everything to do to repay your loan balance on time.
Try to avoid as much as possible renewing or rolling over your loan. Doing that will make the loan cost much more in the long run with the additional fees.
If you don't roll over your title loan, you have a 90% chance of keeping your car.
Suppose you find yourself unable to pay it off on time. In that case, you can try to negotiate new terms. If your credit is improved, you might be qualified to refinance your car!
If none are options for you, you might need to borrow money again to pay off the title loan to avoid losing your car.
Borrowing again to pay off a loan might sound counterintuitive, but it will make it easier in the long run.
TIP: For more information about borrowing money to pay off a title loan, see the section "Alternatives to Title Loans in Colorado" below.
Some people compare an auto title loan to pawn lending (those pawnshops with jeweled family heirlooms and coins). In reality, it resembles more of a payday loan.
Many people have a hard time choosing between them.
A comparison might help you decide whether you prefer a title loan or a payday loan.
How Similar Are Title Loans and Payday Loans?
A payday loan relies on income - how much you'll borrow and pay back depends on your monthly paycheck.
Both payday loans and title loans are used for emergencies. They're much easier and more accessible than traditional loans.
They're also much MORE EXPENSIVE than the typical loan. Both loans' average annual percentage rates are very high.
But they're also some of the few loans available for people with bad credit.
In a way, they're the income-basedcounterpart of the vehicle-based title loan.
What Makes a Payday Loan Different?
Though they're both very similar, there are a few key traits that make a payday loan distinct from a title loan:
- While the annual percentage rate for title loans is known to be very high, the APR of a payday loan is even higher!
- There are no installment payment plans for a payday loan. You pay once, usually in 30 days by the time you receive your monthly paycheck.
- A payday loan usually requires a credit check.
- A payday loan is an unsecured loan. You won't lose any collateral if you don't make the payments by the due date!
Alternatives to a Title Loan in Colorado
If you don't think you can pay for Colorado title loans on the due dates, losing your car can cost much more than what you can borrow.
If that's the case, consider the following options:
- Negotiate your debt to make it more manageable
- Ask for an extension from the creditors
- Pay in advance through your credit card
- Ask for money from family and friends
- Find financial organizations that look at your whole socioeconomic history instead of only your credit score to avoid high APR
- Consider unsecured loans
- Sell some of your personal property and valuables through social media or in a garage sale
Frequently Asked Questions
Title loan lending is fast and easy, but you might be confused. We'll try to answer all your questions below.
What is the Difference Between a Car Title Loan and an Auto Title Loan?
A car title loan, an auto title loan, and a title loan are synonyms. There is no difference between them, so these terms are used interchangeably.
Note that car title loans in Colorado aren't limited to cars.
Is a Car Loan an Auto Title Loan?
Car title loans and car loans are not the same. But they're meant for different purposes.
Yes, they both require a vehicle title to be used as collateral. Yes, you can drive around with that vehicle as if nothing had happened.
But an auto loan (or car loan) is meant to purchase a vehicle. Usually, the vehicle being purchased is used as collateral.
For instance, if you're using an auto loan to purchase a car, you can make payments to buy the car in monthly payments instead of paying the whole cost at once.
But you'll lose the car you just bought if you fail to pay in time.
Meanwhile, you can use a title loan to borrow money for any purpose.
Do Lenders Offer Military Benefits?
If you performed military service, you might be able to get lower costs on title loans. You can find more information regarding Military Lending Act on this website.
Don't let a low credit score or time issues get you down. A car title loan can help you escape your short-term financial emergency.
Though it's fast and easy to get one, it always helps to be extra-prepared.
By following the advice in this article, you'll be able to get a loan, avoid debt, and work your way out of your crisis!