Title loans have been offered for years throughout the United States and they’re typically seen as a way to borrow money when other loan options aren’t an option. Most people looking for an emergency loan turn to a personal loan or payday advance, but what about if you have poor credit or want to avoid dealing with an unsavory lender?
The advantage of taking a car title loan is that you can borrow much more than you’d get from an unsecured lender. Title loans are secured by your vehicle, and a bank title loan could net you $3,000 or more using the equity from the vehicle as collateral. You don’t need good credit and you can get your cash in 24 hours. What about if you want to get a title loan from a reputable bank or large finance company? Unfortunately, at this time, you can’t get a title loan from a bank; let’s break down why this is.
Big banks don’t offer title loans for a handful of reasons. We get this question often, and most people are surprised that banks no longer offer title loans. Many applicants would prefer to get cash from their local bank and that’s understandable. Established banks provide emergency cash loans but with increased Federal regulations, offering these loans is no longer possible. Let’s examine the facts to determine why banks don’t offer auto title loans in Florida.
Why Don’t Banks Offer Title Loans
Banks often deal with customers with good credit, and most lending offers are unsecured. Besides that, they must adhere to regulatory guidelines by the Federal Government that mandate who they can offer loans to and what types of loans they can offer.
These factors often cause banks to stick with unsecured personal loans rather than giving out car title loans. While they require more credit, they allow the bank to be comparatively more secure and gain more monetary profits. Banks will not question why you need money and how you plan to spend it. These requests put the onus on the borrowers, making it quite risky for them while more credible for the bank. They also have a ton of paperwork. However, if you are taking out a car title loan in California or any other state with your automobile as collateral, here are some factors you should be aware of.
A Bank Will Not Let You Use A Car Title as Collateral For A Title Loan
Compared to unsecured loans, it is easier to obtain a secured loan as they are not so picky about excellent credit scores. This is because collateral or a paid off car title is in place. However, the possibility of default remains relevant, giving them more reason to avoid it. Second, banks charge higher interest rates on the loans they give out in case of personal loans. Third, a bank has to follow way more complex regulations and background checks than companies that offer title loans in 24 hours or less. If your vehicle loses value due to damage, it may be tricky for the bank to cover it up.
As of 2024, No Banks or Credit Unions Offer Title Loans In The IS
The risk of losing your vehicle’s collateral can lead you toward a personal loan. You may not realize the possible implications of it in comparison to lenders that offer title loans. Despite the interest rates and credit scores, a borrower might want to go ahead with a personal loan and these loan offers are still possible with a bank or credit union. Banks may in fact prefer the old days when they could offer title loans as they at least had security that backed up the money they lent out. Online title loans are basically for people who need cash fast. Most have bad credit, and some don’t even have a checking account. But they should only consider an auto title loan if they have no other options to get emergency cash.
Other Lending Options Besides A Title Loan From A Bank
If you’ve gotten this far, you have undoubtedly realized that a bank title loan isn’t likely an option in 2024. A few small credit unions may offer these types of title pawns, but those loans are rare and you can only borrow a few hundred dollars.
If you’re still looking for ways to borrow cash, consider a cash advance or an unsecured loan from your bank or credit union. The credit requirements for any personal loan are tight; if you don’t qualify, you can move on to payday loans and cash advances. These loans have high interest rates but don’t require a credit check, and you can often repay the loan in 2 to 4 months. Whatever route you choose, go with a lender you trust and don’t settle on a bank or credit union if they’re willing to offer you a cash loan. Instead, go with a company offering a competitive rate with a realistic repayment term.
