Co-owning a car with a family member or a friend isn’t unusual. But if you have an emergency that requires liquidity, and you’re considering car title loan,the co-ownership can affect your chances of getting a loan..
How Auto Title Loans Work
Auto title lenders allow you to borrow a certain amount based on the value of your vehicle. The greater the vehicle’s assessed value, the more you can borrow. The value is dependent on your car’s make and model, as well as its mileage and condition.
These loans are a short-term loan option. Lenders structure loans for repayment within a few weeks or months, so they usually give a loan for amounts between 25 and 50 percent of a car’s value.
The process of applying for auto title loans is often fast and easy, as it’s designed to finance an unexpected expense right away. You take your car to the lender’s location, the staff evaluates your vehicle, checks its papers, discusses the terms of repayment, and turns the funds over to you.
You don’t need to leave your car with the lender. You can still drive home and use it during the repayment period; the lender only needs its title as collateral for your loan. Different vehicles can be used as collateral. Many title lenders in Provo, for instance, take titles of motorbikes, ATVs, and trucks.
Getting a Title Loan on a Shared Car
In title loans, you can only get the title of your car from the lender after repayment. If you share the title with someone else, this can affect your chances of getting the loan. This is because by law, the co-owner of the vehicle is also responsible for loan payments. They will receive notices if you default. If repayment is not made in time, they could lose the car as well. You have to talk to your co-owner and have them on board with your plan before applying for the loan together.
Because of potential legal difficulties that may arise from loans on co-owned vehicles, some lenders don’t allow joint title loans. In such cases, borrowers can ask the co-owner of the vehicle if they are willing to have their name dropped from the car title. Once they’re apprised of the situation and have the details of the loan, taking their name off the title could protect them from possible liabilities. After a co-owner’s name is taken off a title, the Social Security Administration and local DMV must be presented with documentation.
Making ends meet can become harder due to hospital bills, home repair, and other unexpected expenses. But you can always turn to short-term loans like title loans. Even if you share a vehicle, you may still get a car title loan — as long as you’re willing to do a few extra steps.
Remember, however, that the biggest risk in title loans is losing the car in case of a loan default. Since you’re sharing a vehicle with someone, make sure your co-owner is aware of any risks. More importantly, plan for and pay the loan responsibly, so you and your co-owner don’t incur losses.