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How Do Car Title Loans Work in Texas: Everything You Need to Know

Signing a car title loan

There are many times in life when you need money fast. You may have a medical emergency or need money for a down payment on a new apartment. Whatever the case, it’s often difficult to get cash immediately, which leaves some turning to car title loans to secure the funds they need.

If you’re a Texas resident, you may wonder: How do car title loans work in Texas? We’ll have that answer and more in our guide to car title loans in the Lone Star State.

What Is a Car Title Loan?

A car title loan is a short-term loan that you make with a lender. They give you a loan, and, in return, you use your car as collateral. You give them your car title, and you commit to making payments to pay off your loan over a short period.

This type of loan is easy to get because lenders rarely perform credit checks and will have you fill out very little paperwork. In many cases, you could even be instantly approved for a car title loan and get your money just after meeting your lender for the first time.

How Do Car Title Loans Work in Texas?

To receive a car title loan you can afford, you need to consider all of your options. Many lenders have varying rates and terms for their loans. You should take your time when picking a lender to find the deal that’s right for you. Pay special attention to interest rates. Some lenders will even have options allowing you to customize your payment plan.

Once you decide on a lender, you’ll need to meet with them in person.

At this meeting, bring:

  • Your car
  • The title of your car
  • Personal identification like a driver’s license or passport
  • Anything else your specific lender requests

During the meeting, you’ll discuss the terms of your loan and sign paperwork. Keep in mind that your lender will usually only use a car as collateral if the vehicle is completely yours and you aren’t still making any payments on it.

When you’ve completed the meeting, your lender will give you the loan. You’ll then be able to drive away in your own car. Then all you have to do is make regular payments to the lender during your loan term.

How Much Money Can I Get From a Car Title Loan?

The amount of money you can get from your title loan depends on your lender and the car you are using as collateral. Most lenders will give you 25% to 50% of your car’s value. Depending on your car’s worth, this could be as little as $100 or even as much as $10,000.

Anytime you have a car loan, you also need to consider how much you will pay over the long term. A lender will charge you an interest rate every month. This is usually around 25 percent. So if you received a loan of $600, at the end of the month when your loan ends, you will have paid $750.

If you can’t pay off the debt in time, some people will work with their lender to extend the loan. While possible, this isn’t a great idea because it will add significantly larger interest and fees.

How Long Does a Title Loan Last?

The length of a loan depends on the lender, but most car title loans have a repayment period of 15-30 days. However, in Texas, you can extend a title loan beyond the 30 days for up to a max of 180 days.

What Happens If I Miss a Loan Payment?

While your loan is active, you’ll make regular payments to your lender. If you make a late payment or miss a payment, the lender could take your car.

Once the lender takes possession of your vehicle, it’s legally theirs to do whatever they want with it. The lender will often sell your car to make up for the money they lost. They will keep the profit if they make more money from selling your car than you owed.

An Option That’s Better Than a Car Title Loan

Car title loans may seem convenient, but they’re often not the best way to get money when you need cash fast to cover emergencies or urgent bills. If you’re considering a car title loan, turn instead to Power Finance Texas.

We provide Texas residents with cash loans fast—no credit checks or car titles needed. We can even get you up to $1,250 in just a few minutes. If you need money now, apply for an installment loan so Power Finance Texas can get you the financial help you need.