Title Loans in Connecticut: A Complete Guide [2022]
Are you in a financial situation requiring immediate cash to be resolved?
Often, a loan helped pay for an important bill like utility expenses or medical emergencies.
Look into car title loans in Connecticut today and solve your money troubles! It can be as easy as filling out an online loan request or making phone calls.
We have put together a full guide to this loan product to help you overcome your financial problems.
Car Title Loans: Everything Explained
A car title loan also called an auto title loan, is a type of secured loan in which you use your vehicle as collateral. You will surrender your vehicle title to the loan providers.
Luckily, you can still drive it around like you normally would!
Typically, providers don't do a credit check, so having a bad credit score will not prevent applications from getting approved.
Because of this, interest rates tend to be on the higher side to account for the risk taken by lenders.
On the bright side, a title loan is ideal for people who need cash urgently as it can be granted even at the pre-approval stage.
Unlike traditional alternatives from "bigger" financial organizations like banks, direct lenders can give you the money on the same day or one business day later.
Is It Different From a Motorcycle Loan?
NO, motorcycle title loans do not work differently from car title loans in Connecticut.
The main difference, the type of vehicle to be used as collateral, will only probably affect the loan amount available to the applicant.
The minimum amount may be lower for a motorcycle title loan than for a car title loan because of the discrepancy of values between each type of vehicle.
Differences in the loan rates of motorcycle title loans from car title loans will vary based on the policies of direct lenders.
Otherwise, you can safely assume that the application and treatment will be very similar, if not the same.
If you have both vehicles and are choosing which to use as collateral, ask your lender any questions or concerns you may have so you can pick as strategically as possible.
Are Car Title Loans in Connecticut Safe?
YES! Connecticut car title loans are safe, with a state-sanctioned body governing and imposing rules.
The State of Connecticut Department of Banking is the official regulating body of Connecticut lenders; they also safeguard consumers' rights.
There are various companies offering title loans in Connecticut, so BE WARY of the lenders you are dealing with.
To ensure you transact with a legitimate title loan provider, look them up and see if they have a federal license or other legal papers to present.
This information may be available on their websites; if not, contact the State of Connecticut Department of Banking for your peace of mind.
You may also escalate your concerns with car title loans in Connecticut to them should you run into any trouble.
How Much Can I Borrow With an Auto Title Loan?
Different factors decide loan amounts.
Lenders will inspect the vehicle to be used as collateral to determine the borrowed sum available to an applicant. These factors include:
- The vehicle model
- Year it was manufactured
- Current overall condition
If you've made improvements on the interior or exterior of your car, that will also be considered when lenders decide the loan amount.
To calculate the maximum loan amount you can get with your vehicle, you will need to know its equity.
To do so, find out the resale value of your car, then deduct how much you still owe in payments for it.
Most lenders can offer a maximum sum of up to 50% of a car's equity.
For example, if your car has an equity value of $2,000, then the maximum loan amount the lender may offer you is a thousand dollars.
Can My Credit Score Prevent Approval?
No, your credit score will NOT disqualify you from getting approval on title loans.
In fact, a lot of people with bad credit prefer getting a car title loan because of its accessibility and convenience.
They can get the money quickly and take care of imperative matters, like outstanding utility expenses.
While a lot of title loan lenders won't do credit checks on applicants, some may choose to do so.
By looking at your credit history, they can get a sense of how capable you are of repaying previous debts.
Depending on this information, it may affect how high or low the interest rates will be for your loan.
The better your standing, the better your chances are of getting a lower loan rate!
Who Is Eligible to Apply for Car Title Loans in Connecticut
Providers of car title loans are not very stringent on applicants in terms of qualifications. For one, your credit history need not be perfect.
For another, title loans have a high approval rate which says a lot about how amenable lenders are to working with different kinds of borrowers.
That being said, state laws dictate who can get title loans.
If you're thinking of requesting a title loan, the following statements have to apply to you:
- The applicant must be at least 18 years old at the time of application.
- The applicant must be a resident of the state of Connecticut.
- The applicant must have a steady source of income.*
- The applicant must have a lien-free vehicle title naming them as the owner.
*You don't have to be formally employed. As long as you can prove you have a stable source of money, most providers should be satisfied. Ex: alimony, child support, pension, etc.
Required Documents to Apply for Connecticut Car Title Loans
In order to verify your eligibility for title loans, the lenders will need to see official documents before moving your application along.
The necessary information will be required of you will vary depending on the lender you choose to loan from.
Generally speaking, these are the documents most providers will look for:
- A valid, government-issued ID - Some lenders will be specific and ask for your driver's license.
- Lien-free vehicle title with your name as the legal owner - Other car documents like insurance and registration may also be needed.
- Proof of income/revenue - If this comes from a business owned by you, you can provide bank statements to show that you are creditworthy.
- Other documents - These may include your social security card, personal mail as proof of your Connecticut residence, etc.
Note that if you are applying for online title loans, you need an active bank account to transact with lenders.
How to Apply for Title Loans in Connecticut
Applying for title loans is easy, and there are a few ways to go about it. You can opt for an in-store visit or forego leaving your house and choose online title loans instead.
Whichever you prefer, you can get your loan amount as soon as the title loan is pre-approved. Let's get started!
In-Store Application
If you prefer having a face-to-face interaction with your lender, you can expect their friendly customer service for car title loans.
For in-store application, you have to provide physical, express written consent to avail of a title loan. Follow the steps below:
1. Find Your Lender and Prepare Required Documents
When selecting a provider of title loans, look for a lender with a good reputation among borrowers.
It is also beneficial to shop around for which one can provide you with the best rates and a payment plan that is compatible with your ability to pay.
Once you have found the best lender for you, ready the necessary documents and head to the loan agency location.
A loan agent will be assigned to you and guide you through their company's title loans process. Simply fill up the application form and hand over your requirements to the agent.
Once done, you can move forward with the next step of the application process.
2. Work Out Details and Wait for Loan Approval
After doing the first round of title loans paperwork, your loan agent would need to inspect the vehicle being used as collateral to ascertain how much you can borrow.
They will be looking at the vehicle's make and model, the year it was manufactured, mileage, current condition, etc.
Once they have this information, they will decide the interest rate of your title loan.
Add these fees with the loan amount, and you will have the total of what you owe to the loan agency.
Keep this in mind when you and the agent discuss payment options. As title loans are short-term loans, you have to be smart about payment.
You might find it's better for you to do a one-time payment instead of going for installments.
Some providers even have penalties for early payment, so be sure to talk to your agent about these details.
Once you have agreed on the specifics, your agent will process the application for approval.
3. Get Your Money
Congratulations! Your application came through!
With many of the providers of title loans in Connecticut, you can claim the money you borrowed as soon as your title loan gets pre-approved.
Depending on the amount, you can opt to get the cash upfront or have it wired to your bank account electronically.
Apply Online
Electronic communication has really revolutionized the title loan application process. The online factor makes it CONVENIENT for a lot of applicants.
When you apply online, instant cash can be at your fingertips, but you must have an active bank account to get a title loan.
Here's what you should do:
1. Go to Your Chosen Lender's Website and Provide the Necessary Information
As with the first method of application, the first step is to choose a lender that is of good reputation and is suited to your needs and capacity to repay.
When you have your pick, visit their site. If the site has more than one loan product on offer, click on the link that sends you to the page dedicated to title loans.
- No need to worry, as most title loan providers employ a very user-friendly interface so that their customers don't get lost on their web pages.
Once there, look for a button that prompts the application. It is typically very visible and contains the words "Get Started Now" or something to that effect.
The website will then ask you to provide information such as your name, birthday, ZIP Code, bank details, and others.
Take your time when supplying your information, as irregularities and mistakes may lead to you getting declined for a loan.
If you're done with the online application, proceed to the next step.
2. Submit Documents electronically
If you choose to apply online, you must have soft copies of your ID, car documents, and other requirements to send to your provider.
They may or may not have the facility to accept the documents on their online platform.
If they do, proceed with uploading your documents via their website when prompted.
If not, you will have to communicate and give the documents via email (through which you will also receive updates about your loan application).
It may worry some applicants who are new to online transactions, but these procedures have become the norm for online loans.
Rest assured that your information is protected and safe with legitimate lenders in Connecticut.
After this step, you can move on to the next stage.
3. Wait for Approval and Receive Loan Amount
The great thing about applying online is that the vehicle doesn't need to be physically inspected by the loan agent.
Applicants can simply sit in the comfort of their homes and wait for a confirmation of their loan approval.
This shouldn't take too long either; some providers of title loans claim they can get it done in as quick as 15 minutes!
It will depend on your lender, of course, but it's safe to say that you may be able to get approval within the SAME DAY or the next business day.
Check your email for updates! They will also inform you if your money has already been transferred to your account.
When you do, it's time to take care of those outstanding utility expenses, urgent medical bills, or whatever situation you're in!
Things to Keep In Mind About Connecticut Auto Title Loans
While a car title loan can be an answer to financial issues by giving you access to quick cash, remember that it is NOT a permanent solution.
Avoid further financial problems by making smart choices when you borrow money. Be mindful of the following things regarding auto title loans:
1. Interest Rates
One of the reasons why borrowers appreciate title loans is because it is ACCESSIBLE.
Even if their lender does a credit check and their score comes out not the best, it will not prevent them from borrowing the money they need to get by.
However, this does not come with its own drawbacks, as title loans in Connecticut tend to have high-interest rates.
The lender can offer financial help, but it is risky for them, especially since the clients they take on don't have the most reassuring credit history.
Even the best title loans in Connecticut will have a considerable rate due to the risks taken on by providers.
The trick really is to look for a good lender with whom you can communicate and who will understand your needs and capabilities.
You should also note that if you are dealing with a legitimate provider, there should be NO hidden fees, as these are illegal.
2. Repay or Repossess
Car title loans are a type of secured loan; it is a kind of loan in which you are temporarily handing over the ownership of an asset to the lender in exchange for money.
In this case, your vehicle is the collateral used to secure the loan, giving the lenders more confidence that their investment will be profitable.
If the loan has been fully paid, including the interest and other fees, in a timely manner, the ownership of your vehicle shall be returned to you.
However, should you be UNABLE to repay the debt within the agreed-upon period, the lender may repossess your vehicle!
If so, you may put up your car for sale to compensate for the remaining balance of your loan.
You must understand the RISKS going into getting a title loan and the gravity of choosing payment options that match your ability to repay.
If this does not sound appealing to you, there are unsecured loans in Connecticut you can check out which do not require borrowers to risk an asset.
3. Other Online Loans
As mentioned earlier, an auto title loan is not the only option available to people who may be considered "high risk."
We will explore two other loan alternatives for which some lenders don't run a credit check, so you can still qualify even if you have bad credit.
Payday Loans
Like car title loans, a payday loan is also a SHORT-TERM loan. They are usually due on your next salary, hence its other name, "cash advance loan."
The interest rates for this loan are also HIGH. Expect charges from the $10-$30 range for every $100 borrowed.
With some lenders, you will be able to get your hands on the loan money at the pre-approval stage. As for the loan amount, lenders typically allow applicants to borrow $500 or less.
This makes it preferable for applicants who need to take care of urgent bills with lower costs like utility expenses, unlike paying for a major home repair, for example.
Payday loans are unsecured loans, so applicants do not need to put down collateral.
Instead, lenders would have you write a check or give them authorization to electronically debit the full loan amount from your provided bank account.
Personal Loan
Traditionally, financial institutions that offer personal loans require them to do credit checks on their applicants.
Fortunately, there are lenders in Connecticut who can still offer it to people who find themselves with poor credit.
The loan amount for a personal loan can go up to $35,000. This makes it ideal for people with financial needs that EXCEED what payday loans can offer.
There is no requirement for collateral because this loan is also an unsecured type of loan.
Compared to a payday loan and a car title loan, personal loans have a longer life. This enables borrowers to make payments in installments over a considerable amount of time.
Note that for personal loans, once you receive the amount in a lump sum, you CANNOT ADD any additional amount of money to the loan for its duration.
Conclusion
Fixing financial issues can get tricky. You have to worry about credit checks, interest rates, and a handful of other things.
In this article, we tried to summarize everything you need to know about car title loans in Connecticut.
It is a type of loan in which your vehicle functions as collateral, and you have to pay back the borrowed money, so your vehicle doesn't get repossessed.
Typically, you will not need a credit check, but if you do, a bad score will not prevent your loan from getting approved.
There are several ways you can go about the application; both ones we've discussed shouldn't take longer than a business day or two, if not an hour.
If you decide this isn't the loan for you, there are other alternatives you can look at as well.
We wish you well in your loan application!