Credit History, Credit Score and Your Kansas City Car Title Loan

Learn how your credit history and credit score affect your ability to get a Kansas City car title loan.

One of the most common misconceptions about Kansas City car title loans is that they are difficult for consumers with bad credit. Unlike loans from a traditional lender, title loans are based on the equity in the borrower’s vehicle. This means consumers can qualify for a title loan regardless of credit score and credit history. In fact, most title lenders do not run an applicant’s credit at all.

This doesn’t mean consumers should assume their credit score is unimportant — quite the opposite. Lenders use credit scores to determine whether someone qualifies for a loan and what interest rate they will receive. Consumers with a low credit score or no credit history are usually stuck with higher interest rates and limited options.

Waldo Financial, a Kansas City car title loan provider, encourages consumers to understand how they can improve their credit score to better qualify for loans and get the lowest interest rate possible. The following are important tips for consumers considering any type of loan, including a title loan.

Co-Signing on Loans Comes with Consequences
There are many factors that go into a consumer’s credit score, including payment history, total debt amount, length of credit history, credit inquiries, and types of credit. This means that having a diverse credit history with different types of credit (such as car loans, student loans, and a mortgage) shows a consumer is capable of managing many types of loans.

Some consumers make the mistake of co-signing on loans for other people to diversify their credit mix and improve their credit score. While this may work, it can also backfire if the other person defaults on their loan. In this case, the co-signers credit report with be hit with late payments and their score will go down.

Personal Information is Irrelevant
Many consumers erroneously assume that their personal information, such as their age or gender, is a factor in their credit score. The truth is that these personal details are not taken into account at all. Instead, factors like age of credit history, types of credit, whether there are missed payments or derogatory information, or high credit card balances are taken into consideration.

It’s Possible to Improve a Credit Score
Finally, Waldo Financial encourages consumers to take action to improve their credit score in any way possible as a better credit score translates into easier loan qualification and better rates. There are many ways to improve a credit score, including paying off credit card balances, making payments on time, not using all available credit, and avoiding applying for too much new credit at once.

Credit score

What You Need to Know for a Kansas City Car Title Loan

Kansas City car title loans are short-term loans designed to help you through an emergency. While a title loan does not require excellent credit, there are some requirements to meet to be approved. There are also factors that determine how much you qualify for, including the value of your vehicle and your ability to repay. Despite this, title loans tend to be very straight-forward, allowing you to receive your funds in as little as one to two business days.

How a Title Loan Works
A Kansas City car title loan is very basic. After applying online or in-person, you will need to provide basic documentation to verify your information, including the value and condition of your vehicle. Your loan will then be processed. If the loan is approved, the title loan provider will hold title to your vehicle until the loan is paid off. As a borrower, you continue driving the vehicle while you pay off the loan. Once your loan is paid in full, your title will be returned.

Is Good Credit Required?
Good credit is not required to be approved for a title loan. In fact, lenders will not even check your credit. Instead, your income will be considered to determine how much you are comfortable repaying each month. This is one factor that determines the maximum you can borrow. You can still qualify for a loan if you are retired or on disability, assuming you have some source of income such as a pension or disability benefits.

Does the Vehicle Need to Be Paid Off?
If you own your SUV, truck, van, or car in full and it is less than 10 years old, it can be used to secure a title loan. Still, your vehicle does not necessarily need to be paid off to qualify for a title loan. If you have just a few payments left or significant equity in the vehicle, the lender can work with your dealership, bank, or credit union to pay off your remaining balance from your loan proceeds. You will receive the additional funds.

The amount you can borrow against your vehicle is based on your vehicle’s value and how much equity you have.

If you are considering a Kansas City car title loan, keep in mind that not all title loan providers are equal. For example,some lenders charge pre-payment penalties that are designed to keep you in debt and penalize you for being responsible and paying off your loan early. Compare loan terms carefully and choose a responsible lender like Waldo Financial to make sure your car title loan is affordable and free of hidden charges.

Which Car To Use for Your Kansas City Car Title Loan?

A Kansas City online car title loan can help you get the cash you need quickly, even when you can’t obtain a loan from a traditional lender. Car title loans are available to Kansas City consumers with bad credit or no credit history, as well as those who are self-employed and have trouble meeting the stringent requirements of a traditional loan.

Title loans are secured loans that use your vehicle’s title as collateral. Also known as a pink slip loan, this type of short-term loan uses the clear title on your vehicle rather than your credit score to make your loan. You keep driving your vehicle and typically provide a second set of keys to the lender until the loan is paid in full.

Consumers who have more than one vehicle may be left with an important question:

Which vehicle should I use to get a Kansas City car title loan?

To decide which vehicle to use, it’s important to understand first how a car title loan provider decides the maximum loan amount.

The amount of money you can borrow with a Kansas City car title loan depends on the lender’s assessment of the vehicle’s market value, as the vehicle itself is collateral for the loan, much like a mortgage on a home. Generally the car with the highest value will be the best one to use to get the title loan as you can borrow a larger amount of money.

Your car’s value isn’t the only important factor, however. In most cases, you must have a clean title with no outstanding liens on the vehicle, although some lenders do make title loans on vehicles that still have a small remaining loan balance with equity. This may affect your decision.

Finally, if the amount of money you need to borrow is less than the value of either car, which car you use to secure the loan is less important. After all, you will retain possession of any car you use to get a title loan.

Consumers who have questions about car title loans can contact Waldo Financial, a Kansas City car title loan provider, to speak with a representative. Waldo Financial strives to offer the best in customer service to help borrowers make an informed decision that works best for their situation. Call (816) 333-6800 now for a Waldo Financial car title loan or apply online for your Kansas City car title loan.