It’s no surprise that most Americans are living paycheck to paycheck. High levels of inflation and an increasing wage gap keep millions of workers living on a tight budget.
Unfortunately, that means very little money is available for emergencies. If something comes up, you might be straight out of luck. Luckily, most people have access to cash, even though they don’t realize it.
It doesn’t matter what you own, whether it’s a house, an RV, a boat, or a motorcycle, if you have something of value, you have access to cash thanks to title loans.
Title loans on motorcycles are a convenient way to borrow money against your motorcycle.
They are affordable and easy to get. But how do they work? Keep reading below to learn more about motorcycle title loans.
What Is a Title Loan?
In many instances, title loans are a better option than using a credit card for an unexpected expense. Credit cards are unsecured loans. That means lenders charge insane interest rates, in excess of 17% to use credit cards.
But title loans are different. Title loans are secured loans. To get a title loan, you use something of value as collateral.
If the borrower fails to pay back the loan, the lender gets to keep (and resell) the collateral. That way, they don’t lose money. Or if they do, it’s less money than they would’ve lost with an unsecured loan.
Using collateral makes title loans more affordable when it comes to interest rates. And the borrower requirements are often less strict since the risk is lower.
Title loans are just one type of secured loan you can get. They obviously only work on items that are issued a title of ownership. That means cars, RVs, boats, and motorcycles.
Some lenders may only offer title loans on specific items, such as motorcycles. Others offer all types of title loans.
How Do Title Loans on Motorcycle Work?
So how does a motorcycle title loan work? It starts with your title. You need to own the title in your name in order to take out a loan against it.
When you supply the title to your lender, they will place a lien on the title. That means you can’t sell the vehicle or transfer ownership without first paying back the lender with the proceeds.
The lien on the title is public record, so there’s no getting around it. If and when you pay back the loan, the lien is removed from the title and you are once again free and clear.
Other than getting cash, nothing changes about owning your motorcycle. It’s not like a pawn shop where you have to hand something over in order to borrow against it. You can continue to keep driving your motorcycle while you have a title loan out.
And you also need to keep making payments on the motorcycle, if you don’t own it free and clear.
How Much Can You Borrow?
Your lender will evaluate your motorcycle to determine its current market value. This depends on the year, make, model, mileage, and current condition of the motorcycle.
Once a value is determined, you won’t be able to borrow above that amount. You likely won’t be able to borrow against the full value of your motorcycle, either.
Lenders will allow you to borrow a certain percentage of its current value, which might be between 50% and 75%, depending on the lender.
You also need to consider your equity. If you have a loan on the motorcycle, that affects how much you can borrow. You can only borrow against your current equity.
So if your motorcycle is worth $10,000, but you owe $4,000, then you only have $6,000 in equity. So you can borrow a certain percentage of that $6,000.
That’s because there’s already a lien on the motorcycle. If you were to default on your title loan, the motorcycle would be sold and the original lender would be paid back their $4,000 first.
Then the title loan provider would be paid back their money after.
How to Get Title Loans on Motorcycles
The best title loan will offer a simple, streamlined application, easy-to-understand requirements, and swift payment. Title loans on motorcycles are known to be fast and easy to acquire.
You can visit any of these locations to process the loan in person, or you can apply online with various lenders.
To submit an application, you’ll need to provide a copy of your driver’s license and the motorcycle title with your name on it. You’ll also need to verify your monthly income and proof of residence.
If applying online, you can include photos of your motorcycle to help the lender see the current condition.
You’ll then work with a loan specialist to decide on the terms of the loan such as the payback schedule and how much you qualify for.
As long as everything looks good on your application, you can expect to receive your funds in just a few days or less.
Benefits of Motorcycle Title Loans
Many people prefer to take out title loans over traditional loans or personal loans. That’s because the loans are secured so interest rates may be lower.
But also, you can apply, get approved, and receive your funds very fast, unlike traditional loans.
There are also no restrictions on using the money from your loan. You can spend it on anything you want, from bills to a vacation. It’s not like a student loan or home improvement loan.
Lenders also aren’t as concerned with your credit history when issuing a title loan. They will check your credit report, but it’s not as big of a factor as it is when applying for a credit card.
So title loans are often ideal for those with low credit scores who might be trying to build it back up.
Get Your Title Loan Today
Title loans on motorcycles are a great option for those who need fast access to cash. They are easy to get, secured loans that won’t impact your ability to drive on a daily basis. Contact a loan specialist today so you can get the funds you need tomorrow.
Looking for more information like this? Visit our blog now to keep reading.