It has been a long year for Americans, especially for those living in Montana. Since the pandemic began, at least 14% of Americans have used up their emergency savings. Around 29,000 Montanans could not pay rent on time, and more than 71,000 said their households experienced food scarcity. And 1 out of every 10 Americans had to borrow money to cover everyday bills and expenses. Some have taken a Montana title loan.
If you are in this position, you are certainly not alone. We understand how stressful it is to worry about covering unexpected costs. It is wise to understand all your options before sourcing emergency cash.
A Montana car title loan might make sense for your situation. Keep reading to learn more about this loan type and how you might secure one quickly.
What Is A Car Title Loan?
Most loans require borrowers to have a fair to good credit score, healthy financial history, a solid employment record, and little to no outstanding debts for funding approval. Title loan candidates usually apply for loans for a specific purpose, like purchasing a car, debt consolidation, or unexpected life costs. Things happen!
Unlike a personal loan, a car title loan is a secured loan. This collateral becomes payment to the loan provider if you do not pay back the loan. In the case of a car title loan, borrowers use their vehicle title as collateral.
Car title loans allow a lender to place a lien, which is a right to keep possession of the item if the payment fails, on their car title. At this time, the borrower will temporarily give up the hard copy of their vehicle title in return for the funds they need.
A borrower receives a loan in the approved amount without having to release or sell their vehicle. Lenders only require a hard copy of the title. In return for lending the requested funds, the loan company becomes what is called the lien holder. That means that the borrower will not be able to sell their car until they meet the agreements of their loan terms.
Because of this lien, a car owner must pay off the Montana title loans entirely before selling the vehicle.
The loan provider will then return the car title to its owner, giving them full rights to the asset. If the borrower defaults, the lender is legally permitted to repossess the vehicle.
Car title loan applicants most commonly use their funds for:
- Major purchases
- Home improvement
- Medical expenses
- Special occasions
- New appliances
- Car emergencies
- Taxes owed
- Utility expenses
Car title loans are great options for those with little to no credit or those struggling with bad credit. That is because a lender will only evaluate the value and condition of the vehicle. Know those title loan lenders typically avoid checking the credit history or job type of the borrower! Car title loans are not a good fit for a vehicle that is still under financing.
Car Title Loan Regulations
According to recent studies examining the financial health of the Big Sky State, data suggests that 13% of the population of Montana live under the poverty line. On average, Montana residents make an annual income of about $6,600 less than the national average. That makes access to title loans an advantage to Montana communities.
Because title loans are not openly available from local providers, Montana residents are welcome to apply for online instant cash loans. Filling out an online application makes it easy to start the process.
How Much Can You Borrow?
Due to the risky nature of the loan, car title loans are usually short-term loans that require expedited payment terms. They typically carry higher interest rates than personal loans, which look at a credit score. Even though the car title secures the loan, there is sometimes a risk of default.
The value of the collateral the borrower can provide determines the title loan amount. Most lenders will agree to a loan amount between 30% and 50% of the resale value, though some will go higher!
Pro-tip: a lot of lenders use Kelley Blue Book to find the resale value of vehicles. See how much you may qualify for by checking out the value of your car.
Because lending is, of course, a business, high-interest rates on title loans are due to the companies needing to turn a profit. Because of the terms of the loan, borrowers are at high risk. Therefore, high interest rates are a means of securing their funds and ensures the company sees a positive rate of return.
Luckily, the state of Montana has begun placing strict regulations on title loans by not allowing the APR (annual percentage rate) to reach above 36%. Additionally, many loan companies provide the lowest possible interest rates to serve their communities.
How To Get A Car Title Loan
A borrower can apply for a car title loan either online or at a store location. Depending on the state in which a borrower lives, it might be more convenient to apply and submit all documents through a web-based service.
To begin the process, the borrower will need to complete an application and provide some, if not all, of the following documents:
- A valid government-issued ID (like a license, passport, or state ID)
- Proof of income (no specific job required)
- An item of mail to prove residency
- Car registration documentation
- A lien-free car title in the name of the borrower
- Any requested references
- Car insurance (not required in all states)
A borrower can also give Champion Cash Loans a call at 1-888-798-1970 if they would like to connect with a live customer service representative. The representative will likely fax, email, or text additional documents needed to complete the Montana title loans application.
Though the process is straightforward, a borrower must provide a clear title to the vehicle they used as collateral. A clear title means that a car must be:
- Paid in full (no current financing)
- Be clear of any other lien types
Due to the loan terms and the lack of a credit check, most car title loan applications take 15 minutes or less! Once approved, someone can have their funds delivered to their home or wired directly to their bank account.
If the borrower cannot pay back the loan or is late with their payments, the title loan lender may seek to take possession of the car and sell it at auction.
Most lenders will want to work with a borrower to establish a payment plan before repossessing a vehicle. Repossession is a costly practice, as it requires resources to recover the car, auction it, and pay any related court costs. All of these fees interfere with the lender’s final payout and, the vehicle depreciates.
Repossession may occur once a borrower fails to meet the loan terms and without notifying the borrower. In Montana, there does not have to be a court hearing for a lending company to repossess a car or truck.
Once a lender repossesses a vehicle, Montana law states that the lender must mail a notice that allows the car owner an opportunity to retrieve their vehicle once they pay the outstanding title loan debt. Most states require the title loan lender to hold the car for 30 days before the auction. That gives the car owner a chance to make a satisfactory payment.
Remember, due to Montana state law, any amount from the car sale over the existing loan balance should return to the person who defaulted on the loan.
Montana Car Title Loans
We’ve all needed quick cash at one time or another. There’s no telling when life might require a plan to pay for unexpected medical emergencies, overdue bills, or late mortgage payments. A car title loan can help.
Wondering how much cash you can get today? Submit your information for a free consultation. One of our title loan representatives will contact you with more info!