When you might need some extra funds to pay some bills, pay someone back, catch up on your bills or need a downpayment towards another loan, car title loans are a great way to get ahead. For you to take out a car title loan, you simply must prove you own your vehicle, and the title must be clear of any liens owed on your car. You can get a title loan on many different types of vehicles and more, including cars, trucks, SUVs, ATVs, and certain types of camper trailers and RV homes.
Taking out a quick loan by us the title of your car as collateral is no longer the cliche it used to be and is much more normalized and safer than ever. There are some great car title lenders for car title loans in Calgary, and more and more people are learning about how to secure car title loans to leverage the equity of their vehicle.
We will be looking at an overview of how credit works and how title loans affect your credit in Alberta.
How do loan approvals work in Alberta?
- In Alberta, securing a car title loan is a big advantage and getting a loan without good credit is a hard thing to come by when the banks in the Calgary area generally require a lot from you before you can get approved. You have to have a good credit score, and you often must provide proof of income. You might have the ability to pay back a loan and afford the payments but not necessarily the credit or the downpayment to do so. This can be unfair when life provides unforgiving circumstances, and you have the income to pay the loan off early.
How can life’s many different circumstances affect your credit score in getting a loan approved?
There are many reasons you may not have the credit situation you would need to secure a typical loan from the banks.
- You could have started a new job. When you start a new job, banks in Alberta want to see you at your job for six months to a year before they would allow you to take out a loan. If you are an entrepreneur and start your own business, it can be even more challenging. I have started my own business, and I found out the banks in Alberta do not recognize your income for up to two years, and at that point, they will require proof of income with two years of T-4’s. Car title loans can help you with a loan in this case as there is no credit check.
- A person could go through a divorce and file bankruptcy due to having joint credit, and maybe one of the people files bankruptcy for a fresh start. If this is the case, you still may have a secure income from your job but no longer the credit ability to apply. It takes seven years before you can start to rebuild your credit. If you need, you can always use your vehicle to get that money from a title loan lender.
What credit will be required when you go to secure your auto title loan in Alberta?
- None. There is no credit required for you to secure a title loan in Alberta with most auto title lenders, and you could even apply for your loan online and get an answer the same day. When you are trying to rebuild your credit or keep a high credit score, it is important to keep your credit applications at a minimum, or your credit score can be affected. When you apply for a car title loan, your lender will not need a credit check to approve you or even proof of income. Simply all that is required is for you to provide the title of your vehicle as collateral to pay back the loan.
The best part of taking out a car title loan is that the payments are affordable, and you get to keep your vehicle if during your loan term. Just ensure you have a plan to pay back your car title loan payments on time and pay the loan off even sooner if you want to avoid the interest rates.