Need quick cash but still making payments on your car? You might be wondering, “Can I get a car title loan on a financed car?” The answer depends on your situation and the lender’s requirements.
At Cash Loans Alberta, we understand that not everyone owns their vehicle outright. That’s why we’re breaking down how it works, what your options are, and what you should consider before applying for a title loan on a financed vehicle.
What Is a Car Title Loan?
A car title loan is a short-term loan that uses your vehicle as collateral. In most cases, the lender holds your car title until the loan is paid back. If you don’t repay the loan, they may have the right to repossess the vehicle.
Usually, car title loans are offered to borrowers who own their vehicle outright, meaning it’s fully paid off and there are no outstanding liens from other lenders. But if your vehicle is still financed, you may not have full ownership yet, which can make things a bit more complicated.
So, Can You Get a Title Loan on a Financed Car?
It depends on two things:
1. How much equity do you have in the car
Equity is the difference between your car’s current value and the amount you still owe on it. If your vehicle is worth $12,000 and you still owe $5,000, your equity is $7,000. Some lenders may let you borrow against that equity.
2. Whether the lender accepts second-lien title loans
Some lenders (like banks or title loan specialists) only work with vehicles that are fully paid off. Others may accept a second-lien title loan, which means they place a second claim on the vehicle behind your original auto lender.
Cash Loans Alberta only offers title loans on vehicles that are fully paid off. This helps protect you from taking on too much debt and ensures a smoother loan process.
What Are Your Options If Your Car Is Financed?
If you’re still making payments on your vehicle but need access to cash, there are a few options to consider. One option is to wait until the car is fully paid off — once you own it outright, you can then apply for a traditional car title loan. If waiting isn’t realistic, you might look into personal loans from lenders who don’t require collateral.
Another approach is to increase your down payment or pay off a larger portion of your auto loan to build equity faster, which may open up more borrowing options. In some cases, selling or trading in your vehicle, paying off the remaining loan, and using the leftover funds for your financial needs could also be a practical solution.
Each option has its pros and cons, so it’s important to choose the one that aligns best with your financial situation and goals.
Things to Keep in Mind
Before applying for any loan using your car, ask yourself:
- Do I have enough equity in my vehicle?
- Can I realistically afford the monthly payments?
- What happens if I can’t repay the loan on time?
- Is a second-lien title loan worth the risk?
Taking the time to understand your financial position now can save you from bigger headaches later.
Use Your Vehicle to Access Cash Without Giving It Up
If you own your vehicle outright, we can help. At Cash Loans Alberta, we offer fast, secure car title loans with no credit checks. It’s a simple way to get the cash you need, with the peace of mind you deserve.
And the best part? You can continue using your vehicle even after you accept the loan!
