What is a Rebuilt Car Title Loan?
Financial crises happen in life, and none of us are immune. Sometimes having extra cash at a critical moment can make all the difference.
Many people have gotten the funds they need to make it through a financial emergency by taking out a title loan on a car they own. But what if your car has a rebuilt title? You may be wondering, can I get a loan for a rebuilt title car?
This article was brought to you by TFC Title Loans, we try to bring to you the most informative information. If you are interested in getting a title loan near you, we are able to help you with our large referral network.
All of our referral partners are in compliance with the CFPB.
What is a rebuilt title?
To understand what a rebuilt title is, we first need to look at salvage titles.
A car is given a salvage title when it has been so badly damaged that the insurance company decided it wasn’t worth repairing. In other words, a salvage title car is one that has been “totaled,” meaning that it’s been declared a total loss. The law requires that the term “salvage” must be marked on the title certificate of any totaled car so that potential buyers are alerted to the vehicle’s damage history.
Salvage cars are not considered roadworthy, and in most states cannot be driven on the street or sold.
But if a salvage car is subsequently repaired so that it’s restored to a safe and roadworthy condition, its status can be changed. After it passes a state inspection to verify that it is fully operable and safe to drive, the car will again be allowed on the roads and can be sold. To indicate its history of having been severely damaged and then repaired, the term “rebuilt” is marked on the vehicle’s title certificate in place of the “salvage” designation.
So, a rebuilt title refers to a vehicle that was severely damaged and then restored to good running order.
Note that although a rebuilt car may run well, it will never again be eligible for a “clean” title (a clean title indicates that while the car may have suffered some damage, it’s never been totaled). Vehicles that don’t have a clean title always have a lower fair market value than similar vehicles that do.
What is a title loan?
A car title loan is a short-term loan that uses the title to your car as collateral. With this type of loan, the loan company holds the vehicle’s title, rather than the vehicle itself, until you repay the loan. That means you can keep driving your car while you are paying off the loan.
Car title loans have often been a lifesaver for people who need extra money fast.
Can I get a title loan on a rebuilt title car?
The short answer to the question of whether you can get an auto loan for a rebuilt title car is, yes, you can!
But because of the rebuilt title, getting a title loan may be more difficult than if the car had a clean title. For example, although a rebuilt title car will have passed a state inspection to certify that it’s fully drivable, that doesn’t mean all the original damage was corrected. There may well be hidden damage that isn’t revealed by a visual inspection. So, potential lenders have difficulty assessing the real market value of the car. As Kelly Blue Book notes:
A salvaged, reconstructed or otherwise “clouded” title has a permanent negative effect on the value of a vehicle. The industry rule of thumb is to deduct 20% to 40% of the Blue Book® Value.
That’s why traditional lenders, such as banks and credit unions, are reluctant to offer loans on such vehicles.
However, there are lenders who specialize in handling such loans. TFC Title Loans, for example, is a major nationwide car title loan company that, if you qualify, will be happy to provide a title loan on your rebuilt car or other vehicles.
What does it take to qualify for such a loan? Here are TFC’s requirements for getting a rebuilt car title loan:
- You must provide a valid rebuilt title certificate in your name to prove that you are the legal owner of the car.
- The car must be fully operable and roadworthy. A lender like TFC will inspect your car, at least briefly, to verify that it’s in good enough condition that its market value is not compromised.
- You must be able to demonstrate that your income is sufficient for you to make your monthly loan payments. The good news about this, for many people, is that if you show you can make the payments, your credit rating won’t be an issue. Because you are offering the car’s title as collateral, you don’t have to have good credit to be approved—having bad credit, or even no credit, won’t necessarily disqualify you. TFC, and other similar lenders, will check your credit score, but only to be sure that you’re not currently in bankruptcy or undergoing credit counseling.
- You must have sufficient equity in your car for the amount you want to borrow. Equity is simply the fair market value of the vehicle, minus any outstanding loan balance.
Unlike the majority of lenders, who will only lend you about 50% of the fair market value of your car, if you own your car free and clear (there’s no outstanding loan balance or lien against the title), TFC will lend you up to 85% of the Kelley Blue Book value. And even if you still have a few payments to make on an existing non-title loan, if you have enough equity in the vehicle, you can still qualify for a title loan!
If you need a rebuilt title loan, TFC Title Loans can help!
Here at TFC Title Loans, it’s our mission to help people like you get the funds you need to make it through difficult financial times in your life. And we can do it fast! If you own a car with a rebuilt title, and you need additional funds right now, we can help you get your loan application approved and funded in as little as 24 hours. So, please contact us to get your application started today or call us today at 1-844-242-3543.
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