Title loans are short-term secured loans that any adult car owner can avail in their state using the title of the vehicle as collateral or guarantor. The vehicle, which could be a car, truck, motorbike or boat, is used as the security. The borrower need not give up possession of the vehicle to get the loan but there should be no lien on the title, in other words, the auto loan must have been repaid in full. The lender will keep the title for the entire duration of the title loan and return it after the lent money with the accrued interest has been repaid.
It is a little inaccurate to say that online title loans do not exist. You can definitely search for title loans online. You will find plenty of lenders that will allow you to initiate the process online and you may even get the exact offer with all the terms including the rate of interest, clauses pertaining to late payment and other defaults.
However, you cannot actually get the title loan disbursed unless you go to one of the offices of the lender and verify certain quintessential facts. Effectively, you cannot get an online title loan without a store visit. It is possible for a lender to send a representative to your residence, office or place of business. This too essentially amounts to a physical inspection.
Why Online Title Loans Don’t Exist
Here are five reasons why title loans can never really be “completely online”.
Lenders Need to Inspect Your Car
All title lenders follow a process of due diligence. One of the basic demands of such a process is the inspection of the vehicle. Borrowers can make any claims. They may even send photographic or video evidence that may later be proven false.
A lender has to know that you do own a vehicle, there has to be a physical inspection to facilitate the valuation and only this appraisal would determine the loan amount. It is relatively easy for borrowers to claim that their vehicle is worth a certain amount. A lender must have that information vetted. You cannot get a title loan without vehicle inspection and a thorough appraisal.
Lenders Must Verify Your Documents
There are certain verifications that must be done in person. For instance, the personal identity of the borrower should be proven before the application process can be completed. The title of the vehicle should also be verified and lenders must ensure there is no lien on it to complete the approval process. In theory, these can be done without being physically present but the asset being used as collateral, which is a vehicle, is worth a substantial amount and hence an in-person verification is necessary.
Title loans are not worth a few hundred dollars. In some cases, the loans can be worth tens of thousands. A lender cannot simply approve such an enormous loan amount without knowing the borrower, without verifying proofs of identification in person and having the actual title. A scanned copy of the title of a vehicle is not acceptable. The original and actual copy must be provided.
Some Lenders Will Install a LoJack
Certain lenders may insist that a LoJack be installed on the vehicle being used as collateral. A LoJack is a recovery system used in vehicles should they be stolen. Borrowers can always say that their vehicles have been stolen and hence they cannot repay the loan.
Lenders would not be able to do anything with the title if the vehicle itself cannot be seized, taken possession of and sold off at an auction. Borrowers have indeed used the stolen vehicle excuse in many cases over the decades. Some borrowers have actually had their vehicles stolen so they were truly helpless, so were the lender. A LoJack is a failsafe in this regard. Unfortunately, it cannot be installed by the lender unless the borrower brings the vehicle to one of their locations.
Online Title Loans Are High-Risk
Title loans are secured so one may think that they are safer for lenders than unsecured loans. This is not the reality though. Title loans are substantial. They are approved using collateral that is effectively mobile.
The asset is not an immovable property such as a house. A vehicle can be thousands of miles away in a matter of days. Title loans are high value and high-risk propositions for lenders. They would not want to grant them online when much about the vehicle and the borrower may not be verified.
Title Loans Are Illegal in Certain States
Title loans are legal in America but there are not legal in every state. All states have the right to legislate on the legality of financial products and services such as title loans. If title loans are illegal in your state and you apply to a lender based in another state, the applicable law would be a little perplexing and there could be complications, including jurisdictional issues.
Title loans cannot be a blanket product or service like consumer goods wherein companies can sell their inventory to anyone anywhere in the country. You must be a resident of a state where title loans are legal to be able to borrow money using your vehicle as collateral from a lender that is registered, licensed and operational in your state.
Title loan lenders do not usually entertain applications from borrowers based beyond the state they are registered in. However, there are lenders with a presence in many states. You would still need to visit one of the nearest offices or locations of the lender to be approved for title loans.
Find a direct lender, check out their locations and go to the nearest office to apply for title loans. You can apply online and then visit their office to complete the process. This may be a swifter option since some of the formalities would be completed by the time you visit their office.