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You cannot get a title loan without a title. A title loan is a secured loan available for a short term that is obtained using the title of a vehicle as collateral or a guarantor. Title loans are not unsecured loans that can be obtained using income as the basis. Such a scenario will warrant an unsecure loan. It is possible for someone to apply for a title loan using a cosigner wherein the title is owned by another person who chooses to use it as the security or collateral.
However, according to SavingAdvice.com, most title lenders will not entertain such applications, not even lenders that process applications online. The one who owns the title has to be the borrower. The title does not have to be of a car as other vehicles are also entertained, from motorcycles to boats.
Title Loan Requirements
A borrower needs to give up the title of the vehicle to the lender who will be in possession of it until the time the loan is fully repaid along with the interest. The borrower shall continue to use the car or vehicle. The vehicle is only seized when the borrower fails to repay by the end of the term or fails to get a renewal on the car title loan. Since the title has to be in the possession of the lender, it must be lien-free as the lender itself will be putting a lien on the title.
A lien on the title is unavoidable for anyone who takes a car loan and is yet to pay it off. Even if there is a month remaining in the repayment of the car loan, the title is not free of the lien. Some title loan companies will consider titles that have a lien for one more month or so. Most title companies will not accept such titles.
Hence, not only do you need a title to get a title loan, you need one that is free of lien. This also means that if you have one title loan and your title is with that lender under a lien, you cannot apply for another title loan regardless of the purpose you may consider it for.
Alternatives To Title Loans
You are not out of options if you do not have a title. You will not get a title loan but you can consider a registration loan or other title loan alternatives. Registration loans, also referred to as a car registration loan or auto registration loan, is a proposition wherein you use the registration of the vehicle that proves you own it and then you use it as the security to get a small short-term loan.
Registration loans will not get you as much money as a title loan. Registration loans may also be a little harder to get since you do not have a title to share or give to the lender. However, it is possible to get a registration loan if your finance auto loan is yet to be repaid in full and you do not have a title free of lien.
Registration loans are regulated in many states. Some states do not regulate registration loans. You are likely to pay much more interest in these states. A registration loan is not very different from a title loan if you consider the basics. However, the terms of lending and the manner in which the lender will go about seizing the collateral will vary.
