What Disqualifies an Applicant For a Title Loan?

Auto title loans can be a good option for people who need access to a fast and convenient cash loan. But what can potentially disqualify an applicant for a title loan? Keep reading to find out about the most common reasons why your title loan application might not get approved.¹

Key Reasons For Disqualification

If you apply for an auto title loan and are willing to put up your car as collateral for a loan, you can rightfully hope for a good chance that your loan application will be approved.¹ And while title loans are known for a a flexible approval process and relatively easy loan requirements, unfortunately, not all title loan applications are approved.

The key issues that could stop an applicant from getting a title loan include:

• Not enough value in the car: Since car title loans are supported by the equity of the vehicle, having a car that does not hold much value anymore is one of the most common reasons why title loan applications are denied. Minimum vehicle value requirements vary from one lender to the next. Generally speaking, the older your vehicle and the more miles you have on it, the lower the likelihood that your loan application will be approved.
• Inability to repay the loan: A potential borrower needs to have enough income to reasonably afford taking on an additional loan payment. Being unemployed, self-employed or on disability does not automatically disqualify someone from having their loan application approved, but having verifiable income is a requirement that all responsible loan companies impose. If the primary applicant does not have sufficient income, adding a co-borrower or co-signer can boost the chance of getting approved.¹
• Status of the car’s title: In order to qualify for an auto title loan, the car that is being used as collateral usually needs to have a lien-free title. If there currently is a lien on the title, this usually means that there currently is an outstanding loan secured by the same vehicle. While some borrowers may qualify for a title loan refinance, it is usually easier to qualify for an auto title loan if there are no existing liens.¹
• Applicant age: Applicants must be of legal age in order to be approved for a title loan. All title loan applications from people who are not of legal age will result in a declined loan application.
• State in which the applicant resides: While title loans are widely available in the United States, they are not available in all states. Most title loan lenders and servicers specialize in offering loans in a few select states. If you reside in a state that is not currently serviced, your title loan application will not get approved.
• Required documents: Obtaining a title loan usually requires that the borrower provides a set of basic documents to support the loan application. This usually includes proof of collateral (i.e. vehicle pictures), proof of income, proof of residence and proof of identification (i.e. a copy of your ID, driver’s license or passport). If an applicant is not willing or able to submit the required documents, a final approval will not be granted for the pending title loan application.

What to Do If Your Title Loan Application Was Denied?

• Find out why your application was denied: When lenders reject a credit application, they are legally required to tell you why your application was denied. While you are entitled to a written explanation, also known as an adverse action notice, you can also simply ask your loan officer for the reason that your application was not approved.
• Fix the issue with your application: Once you have a good understanding why your application did not qualify for approval, you can determine if you’re able to fix the underlying issue. Depending on the reason your application was denied, this could include things like clearing the lien on your vehicle, securing additional income – whether through a co-borrower or an additional job – or finding the required documents that you were missing.
• Apply with a different title loan company: Just because your loan application was denied by one particular title loan company doesn’t mean that no other lender will approve you. If one title loan company denied you application, it might be worthwhile to shop around to try and find a lender with lower vehicle requirements or income requirements. If local title loan providers don’t approve you, it might also be a good idea to check for online title loan options for your state.
• Explore alternatives: At the off-chance that you continue having a hard time meeting the qualification requirements for auto title loans, you can also consider other loan alternatives such as personal loans or pawn loans. You may even consider to reassess needing a loan in the first place by making changes to your expenses.

Final Thoughts On Title Loan Disqualification

Having your loan application declined can be a bit disheartening, but it need not be. By finding out what disqualified your loan application, you may be able to take the first step to get your next title loan application approved. Some of the reasons for title loan denial can be addressed with a little effort, and not all title loan providers have the same application requirements.

With title loan services offered in more than 20 states, an auto title loan serviced by LoanMart can be a good option to minimize the chance that you don’t qualify for a title loan purely based on where you live.¹ Whether you live in Arizona, Florida, Michigan, Texas or one of the other locations serviced by LoanMart, there’s no cost to applying and seeing what you may qualify for.¹